The Impact And Different Industrial Effect Of Monetary Policy On Manufacturing In China

Money play a important role in the production and circulation of commodity for its multiple functions. So it decides that the monetary policy is very important to the economy operation and the monetary policy has always been a hot issue in academic research. However, the majority of previous studies based on the perfect market system, analyzed the effects of monetary policy and its transmission channels. In this method, it ignore Chinese market imperfect economy system and the differences production and operation between various industries, and these will cause that the implementation of monetary policy have different output impact on different industries. To proving this viewpoint, based on the manufacturing-related data from 2000 to 2009, this paper establish theoretical model and empirical analysis the different industrial effects of monetary policy and the various reasons causing this difference. The result shows that monetary policy do cause a different impact on the manufacturing sector in China, the main reason for this difference is because every manufacturing industries has a significantly different in financial situation and the asset proportion of state-owned enterprise, and also different mode of production, Sales methods and different Customers. Therefore, when the central bank regulate the economy through monetary policy, they should be concerned about the differents in these aspects, so they can enhance the relevance and flexibility of monetary policy better, and improve the effectiveness of monetary policy.