The Positive Analysis Of The Impact On The China Economy From The Oil Price

During 21 century, the consume of oil in china has been enormously increased, the negative impact from the high oil price to the economy in china exert an increasing power. Early in 1973, because of the oil-forbidden by the opec , most of the main industrialized country experience an economic recession . Before 2005, the oil price in the international market had a sharp rise, the relative economic problem aroused by lack of oil first came to the public and the politician. With the great grow in the economy, the need for oil in china quickly increased , the change of the international oil price has play an important impact in china . oil industry , as an fundamental part , will exert a great power in the relative industry , such as chemical engineering, chemistry ,and transport and communication trade ,even to the all aspects in the economy. Therefore, it is necessary to study the effect brought by the change in oil price in our country.This article has been divided into 5 chapters, discussing about the over-all analysis in the energy price fluctuation, using the in-put and out-put table to calculate the change in the relative industry. Meanwhile , we use the impulse function in VAR model to see how the other inner-factor act when the oil price has a wave. According to the current condition in china, we offer the reasonable explanation to the part beyond the model analysis, and the political reference to our country in relative industry.Chapter one analyzes the current development state of oil and natural gas industry in China and its important influence on national economy. Since 20 century , most countries in the world begin their industry power period. From then on the economist start to study the power issue, the focal point is oil. The foreign researchers didn't do much study for china . Among them,Youngho chang and Chan Jiang(2000) made the Granger relational checking using the price-data of the leaving-factory oil product between 1980-1999 . The conclusion was the rise of the domestic oil price and the GDP inflation had the positive correlation, while the international oil price fluctuation didn't have the noticeable influence to the GDP of china in statistic. There are two reasons : first, since 1993 china has become a oil-import country. In the series of 1980-1999, most years china was an oil-export country. Therefore, the negative effect brought by the rise of the import oil was partly counteracted by the economic interest , leading to a unnoticeable effect. Second, the import-resource of china are much single ,and most contract are long-term , so the sensation for the short-term oil price rise is very small.Chapter two is about the oil requirement of china using the out-put and in-put table. When the oil came into the country manufacturing channels, it play the role as the initial material . The relative industries of oil are wide , and the industry chain is very long. The international oil price will first affect the domestic oil price ,the spread by the industry chain to the every part of the manufacturing. This can directly influence the regular consumers . With the different transmission mechanism , the different effect will be aroused. According to the 2002 citizen in-port and out-port table, we can specific analysis the dependence of the each industry on the oil.Because oil first came into the industry chain as the initiative material , we can calculate the respective direct consuming factor to know the correlation level with oil . direct consuming factor is one of the most definitions in in-put and out-put methods. The economic meaning is the quantity of the x department directly consuming the y department, to reflect the relation between the different department. In this view, we can calculate when the price of oil rise 10%, how the other citizen department reflect in the price using this method.But direct consuming factor only reflect the direct consume quantity when one department manufacturing. In fact , in the real producing period , the relationship between each department are much more complicated . If we want to know more about the inner-relationship, we should calculate the other consuming factors.Chapter three mainly analysis the background of the international oil market. There are four big oil crisis, the most serious one was between 1999 to 2000. This crisis had a strong impact on those oil-import countries, such as the sharp rise in the inflation and the decrease in the growth rate. It is recorded that when the oil price rise every 10 dollars , it's economic growth rate will decrease 0.44%.Chapter four discuss the impact of the economic condition aroused by the oil price rise. This chapter use the VAR impulse function and the variance analysis to specific define the impact brought by the oil price rise on the relative economic index. In practical , VAR model is an atheoretical model . It is unnecessary to analysis what a factor will effect another factor ,but to analysis when one difference change, or the model experience one impulse , the dynamic influence to the whole system. This method called impulse response function. In conclusion , the impact by the international import oil price on the economic growth is very small .Chapter five mainly describe the oil security in china, and the limitation of this treatise. Through a comprehensive analysis of business cycle, the author puts forward suggestions to the development oil import in China from strategy, politics, industrial policies and development path so as to provide reference to setting down reasonable policy.