International Grain Price Fluctuation's Impacts On China's Economy

China is an important country in grain's production and consumption in the world. In recent years,because of the impacts of the grain's supply,demand, speculation etc, international grain price fluctuates dramatically, and tends to go up in the future, especially appearing the highest record in 2008 during the recent 50 years. It causes widespread concern in the community. Food is the lifeblood of the national economy, and grain price is the base price, which accounts for 11% in the weight of CPI.As China's economic development and the accelerating process of industrialization, the demand for food imports and the dependence on foreign trade are increasing.Food problem becomes another hidden worry in our country in addition to energy and finance, which has something to do with the whole macro-economy. So starting with the international grain price, researching on the corresponding policies to circumvent the risk of food import price and stabilize domestic economy is of great practical significance.This thesis will focus on looking for the evidences of the regularity in international grain price's fluctuation and its impacts on China's economy.Through detailing analysis of statistical data, the thesis looks back the actuality, and explores its inherent characteristics and the reasons of the international grain price's fluctuation during the nearly 50 years, then makes a prospect for the trends in grain prices by phases; On the basis of economic principles,it makes some qualitative analysis by using the methods of induction and causal relationship, the thesis analyses the conductiong mechanism of the international grain price's fluctuation at the aspects of domestic prices,inflation,consumption, investment, import and export trade and so on, then builds up a simple framework of the impacts on the overall economy, and estimates quantitatively China's gains and losses caused by the international grain price's fluctuation since 1998; and combining empirical methods the thesis selectes the monthly datum including international grain price indexes,the domestic grain price indexes,real GDP,import and export trade, the retail sales of social consumptive goods,and fixed asset investment during January in 1995 to November in 2008,and based on cointegration,pulse response function,VAR variance decomposition and Granger test, we validate the international grain price fluctuation's impacts on the above-mentioned main variables.Empirical results show that the international grain price has a long-run equilibrium relationship between international grain price and these variables, and in the short run it will have a significant positive effects on index of domestic prices,while have a negative effects on the retail sales of social consumptive goods and real GDP,and for import and export trade it plays a double-sided role. But the impacts gradually decline in the long term. In addition, there are two-way leading relationship during the international grain price index, real GDP and the import and export trade volume,and it is the the Granger causes of the retail sales of social consumer goods and fixed assets investment in the Granger sense.But as to the domestic grain price index its guiding effect is not significant.Finally,aiming at the main conclusions, the paper puts forward some policy recommendations respectively from the macro and micro level.