Research On The Relationship Between The International Oil Price Fluctuation And China's Economic Security

ABSTRACT:Oil is a kind of non-renewable and rare sources which relates to China sustainable economic growth and strategies. With the rapid development of China's economy, the demand for oil increases sharply which activates the contradiction between demand and supply. Besides, oil price usually changes intensively and the oil industry belongs to the upper industry, the fluctuation of oil price would probably affect the economic growth. According to the concept of national economic security—the connotation and extension, we believe that the volatility of oil prices and Chinese economic security are closely related.In order to understand the relationship between international oil price fluctuations and the China's economic security, smooth the oil price effect in economic growth, and ensure the stable and healthy development of our economy, based on abundant documents and facts, we derive the transmission mechanism how international oil price fluctuations affect China's economic security, and build a model which qualitatively describe the relationship between international oil price fluctuations and the specific indicators of economic security. The model manifests the transmission processes in a clear, intuitionistic and detailed way. The model simplifies the forecasting process of the oil price effect to the economic security. Therefore, it is a practical model. Then, using mathematical methods and input-output method, we prove the validity of the model, and improve the quantitative relationship among the several parts of the model. At the end of the thesis, on the basis of the theoretical and empirical research of the former, we provide the corresponding countermeasures to reduce the influences of international oil price fluctuations on Chinese macroeconomy. These measures are reforming oil pricing system, establishing national strategic oil reserve system, developing oil futures market, and enforcing oil alternative strategy, and so on.The innovative points of this paper are as follows:(1) In this paper, we have an academic, systematic and multi-angle study up on the relation between the fluctuation of the oil price and national economic security. We combine the abstract concept of NES for who is complicated, dimensional and diversified with concretized indicators, defining this problem from the angles of increasing amplitude of economic aggregate, industry and market's security, financial security. According to our data collecting, we believe that oil price's variation should have an obvious impact on those angles mentioned, also the inherent law to a certain degree.(2) After analyzing the price variation we obtain the path of its effects'diffusion and resonance system. On the basis of casual sequence of its tract:internal oil industries accept the effect from external price variation, the delivered to other related industries, leading to the change of whole social economy. At the same time, the variation could exert an influence to total import and export value, both two sides consist the main theme. In detail, firstly we study the international oil price's formation and its fluctuation; secondly we achieve the resonance of pricing system in accordance with domestic policy; then we analyze the results of inflation (rise of cost, investment&consumption etc.); at last, we analyze the impact on net exports caused by the price increase.(3) During our study and research, we design a clear model which concerns the influence of oil price's variation to economic security. With certain mathematical tools we can prove model's availability. This model indicates the way in which the fluctuations of the global oil price affectes national economic security, makes it easier to predicate the influence of the variation, which is practical to some extent. Having designed a model, we prove its availability with some mathematic tools step by step. Moreover, we have found something additional that can't be reflected in this model during our research.This research is based on three main indicators of economic security, so there is a lot of work can be done in building more comprehensive indicators of economic security. And in order to reduce the data error in the prediction of the model, the settings and adjustments of relevant parameters still need further study.