Research On The Fluctuation Of International Oil Price And Its Influence On The China’s Economy

Oil, which is known as the blood of morden economy, is the world’s most important energy and chemical raw materials. And oil price has become important influence of macroeconomic factors. After the global financial crisis in 2008, the international oil price has experienced a turbulent period, volatility more than any previous oil crisis. Obviously, the mechanism which causes fluctuation of international oil price is very complex, and this is decided by oil’s commodity attribute, political attribute and financial attribute. With the excessive exploitation of oil, frequent wars between the Middle East oil producers and natural disasters in the whole world, the international oil market is facing more unstable factors for a long time. Why international oil price changes so frequently? With China’s increasingly close contact with external economic environment, how does the international market oil price fluctuations impact on China’s macro economy? What measures shuld China taken to avoid the negative impact of fluctuation of international oil price? Searching on these problems will help to understand the relationship between international oil price and China’s economy. In addition to that, using positive impact of international oil price fluctuations can provide suggestion and improve the development of China’s oil industry.This paper attempts to analyze international oil price fluctuation in three aspects-formation mechanism, fluctuation mechanism and transmission mechanism. By ananlyzing the price and formation rule of international oil, we conclude that the oil price will be impacted by a lot of factors, such as the relation of supply demand, the speculative demand of petroleum in financial market, war or emergency, economic fluctuation have certain influence on the international oil price. While the relation of supply demand is the most basic factor of the price of oil because of the commodity attribute of oil. The contradiction between limited oil reserves and rapid development of global economy will promote international oil prices in a quite long period of time. The speculative demand of petroleum in financial market, war, emergency and other factors will lead to short-term fluctuations in oil prices, increasing the uncertainty of short-term forecast. The international oil price will impact on economy through supply shock, transmission channel, derived demand transmission and financial transmission channel. Preliminary evidence suggests the fluctuation of international oil affects China’s oil price significantly-there is volatility spillover effet of international oil price and the effect has increased after economic crisis in 2008. The conclusion provies a foundation for searching the international oil price fluctuation to China’s economy.The results of international oil price fluctuation impact on China’s price, GDP, economic structure, foreign trade and financial market suggest that the fluctuation has significant effect on China’s price, and is mainly caused by PPI. Meanwhile, the department which is related to oil industry and the second industry which is represented by manufacturing suffer the largest influence. While the fluntuation does not much affect the third industry which means it is helpful to relieve the impact by international oil price fluctuation if China takes the economic growth model that promote the development of serveice industry and industrial restructuring. Secondly, the international oil price is a main factor for China’s trade, and the impact of international oil price fluctuation on trade in the long run is greater than the effect in the short run. In terms of the structure of trade, the increase of international oil price can rize the export of capital-intensive products and technology-intensive products, but decline labor-intensive export. This has negative effect on international competitiveness of energy-labor-ingensive products but also play an active part on promoting trade structure. Lastly, the impact of international oil price fluctuation on China’s stock market is different respectively due to the different nature of listed company. Rising oil price can increase the stock index return rate of energy industry, but decrease the stock return rate of durable consumer goods industry and public utility industry. The oil price makes non-significant to other industries.On the basis of summing up the conclusion, the international oil price characteristics and the situation of Chinese economy, this paper provides a reference for coping with the shock of international oil price.