Research On Fluctuation Of International Oil Prices And Its Impact On Chinese Economy Growth

With the rapid growth of GDP and the rigid demand for oil caused by deepening industrialization, it is unavoidable for China that the foreign dependance degree in oil consumption contiuously increases. The effect of wave in oil price on the economic growth of China is more and obvious. Based on this setting, Beginning with the mathmatical model about the determinance and wave of oil, the article apply SVAR model in the effect of oil on the growth of China to study the symmetry and asymmetric the resunlts. And we suppose a set of policies based a model of strategic reserve of oil.Focusing on the subject of the fluctuation of international oil prices, this paper tries to grope the relationship between the oil prices and Chinese economy growth. The whole paper is divided into three sections:theoretical discussion, empirical research and study conclusion.In the section of the theoretical discussion, we review the theory about the fluctuation of oil prices and its impact on Chinese economy growth. Including oil pricing, the relationship between the oil price and economic growth, the relationship between oil price and the economic development of China, and the research about oil price transmission mechanism.After the literature review,the author found that the most important factor is the supply and demand. So the article starts from the basic economic model of supply and demand, studying the fluctuation of oil prices and its impact on Chinese economy growth in-depth. This article focuses on explaining three types of elaborate conduct mechanism, which includes cost-driven model, consumption-driven model, demand and supply common effect model. After assessing rigorous analysis throughout the whole industry chain, discovered two specific transmission paths that will transmit the fluctuation of international oil prices along the entire petroleum and petrochemical industry chain, and to the process of industrialization as a whole, which ultimately reflected in the form of PPI and CPI or even GDP, however PPI is always being directly impacted whereas the impact for CPI is not so certain.In the second part, The key point for the article is that it is grounded under the setting of our national economic growth driven by the process of industrialization; variables are chosen in relation to the process of industrialization as well as GDP, the SVAR model is structured by six elements, which include monetary supply, interest, price indices of industrial products, industrialized process index and global oil price; founded on the hypothesis of linear effect and nonlinear effect of global oil prices that will exert impact on China’s economic growth. By utilizing SVAR model for Grainger causal analysis, Pulse function analysis and Variance decomposition analysis as well as applying model test of the stability, concluded a series of enlightening results.In the last section, we draw the conclusion of the research and propose the questions about the oil supply shortage, as well as giving the long-term and short-term measures.