China's Monetary Policy Transmission Mechanism Status And Empirical Test

An active and effective monetary policy has always played an extremely important role in the country's macro-control. In the background that China's economy has entered a new round of rapid growth, how to make more efficient use of monetary policy on the economy becomes an urgent puzzle which must be solved. Clearly, a smooth monetary policy transmission mechanism of monetary policy will directly affect the effectiveness of the results. Therefore, the monetary policy transmission mechanism , has become key factors to solve the problem. At the same time, monetary policy transmission mechanism is the important topics in macroeconomics. Therefore, it is very necessary to conduct further exploration of monetary policy transmission mechanism.The monetary policy transmission mechanism mainly affect credit, asset prices and interest rates through ways of consumption, investment and trade. In Western economics, this process is known as "black box". Because of the different points of view to observe monetary policy transmission mechanism, there were always different points of view in the academic area. Generally, there are monetary transmission channel and credit transmission channel in the monetary policy transmission mechanism. Monetary transmission affects macroeconomic mainly through ways of interest rates channel, non-monetary asset prices channel and exchange rate channel to channel. Credit transmission channel affects macroeconomic variables mainly through the change of financial system and institutions. At present, China's financial system is not so perfect, there are still many instability factors such as the improving market economy system, the incompletely symmetrical information and the cohesion between financial mechanism and economic entities which is far from developed western countries. Therefore, the monetary transmission channel including interest rate and exchange rate channels , plays a weak role which is different from theories. In China, the original credit transmission channel did not completely lose its important role , monetary policy transmission mechanism mainly relies on credit channel.According to the reality of China's economic and financial situation, China's monetary policy transmission mechanism is at an important turning point, changing from simple credit-oriented channel to composite transmission mechanism which is composed of interest rates, non-monetary asset prices and exchange rate channels. In the future, the composite transmission mechanism which is composed of interest rates, non-monetary asset prices and exchange rate channels will become the main way of monetary policy transmission.This paper is based on the existing theoretical knowledge to analysis China's monetary policy transmission channel, making some suggestions to China's monetary policy transmission mechanism. In view of my limited knowledge, there will be some deficiencies in this paper. I sincerely hope the suggestions from teachers. And I will continuously study and enrich my knowledge in the future.