Research On Co-movement Between China Economic Fluctuations And World Business Cycles

The business cycle is an unavoidable phenomenon in every country or region. To some extent, it reflects the developing condition and contradiction of an economy entity or even the entire world economy. Since the economic characters and exogenous shocks suffered are different, the characteristics of economic fluctuation in each economy entity differ from each other greatly. But with the process of globalization accelerating day by day, the economic fluctuation in all the countries or regions does not merely present its own characteristic, but also more and more present the tendency of co-movement.Since China reforming and opening up, the exogenous shocks suffered during economic operation changed, i.e. the exogenous shocks inside weakened progressively while those of world business cycle strengthen gradually and have impacted the economic fluctuation in China. According to it, with the guide of modern economics theory and the latest achievement in time series analysis, this thesis make a systemic and comprehensive exploration to the co-movement of China's economic fluctuation and world business cycle. The thesis focuses on the effecting factors to the business cycle co-movement and the interaction of the economic shocks between China and the world.This thesis consists of five parts. The first part (i.e. chapter one and two) reviews the relevant papers. The second part (i.e. chapter three and four) examines the exogenous shocks' influence on China's economic growth, and analyzes the transmission mechanism between China's business and the world business cycle, in based on the change of exogenous shocks, this research reveals that the style and intension of the exogenous shocks directly influence the China's economic growth and business cycle. Since China reforming and opening up, the exogenous shocks from world business cycle have strengthened gradually and it seems that the business cycle of China is gradually in pace with that of the world. With gradually realizing its promise to entry into the WTO, China will accelerate its pace of opening up. It can be expected that the business cycle co-movement between China and the world will be strengthened gradually.The third part (i.e. chapter five) focuses on the research of the main effecting factors to the business cycle co-movement and the effecting intension. The result shows that in the present stage of opening, undoubtedly trade channels and FDI channels have been the main transmission channels between China business cycle with the world business cycle. At the same time, the finance channels, the coordination of monetary policy and fiscal policy channels, the differentiation of industry structure also play important roles in the co-movement. In the trade channels, compared with inter-industry trade, intra-industry trade plays an even more important role in the transmission of the business cycle between China and foreign countries. The correlation between the intension of FDI, the coordination of monetary policies, the coordination of fiscal policies with the degree of the business cycleco-movement is positive. However, the higher the degree of difference of the industrial structure is, the lower the degree of co-movement of business cycles is.The fourth part (i.e. chapter 6 and 7) makes a further investigation on the business cycle co-movement of China and the world from the angle of shock transmission. By using the time series analysis, taking the world, EU, Eastern Asia, USA and Japan as the examples, targeting the shocks among the fluctuation of GDP growth rate, the fluctuation of total trade (or bilateral trade) growth rate and the fluctuation of China's actual utilized FDI growth rate, this research observes the power and the sensitivity of the mutual shocks between economic fluctuation of China and foreign countries. Besides, this thesis also analyzes the cointegration relationship of GDP growth rate between China and the world (or the sample regions, countries above).The fifth part (i.e. chapter 8) sums up the main conclusions of this research. In bas...