The Research On The Associated Mechanism Between International Oil Price Fluctuation And China's Economic Growth

Oil as "the blood of industry", with different strategic position of general merchandise, is an important strategic material, played a very important role in the economic, defense, political and diplomatic fields. The fluctuation of oil prices affects all aspects of economic and social. As China's oil consumption increase year by year, and the rising dependence on foreign oil, the fluctuation of international oil price will have a major impact on China's economic inevitably; At the same time, China as one of the largest oil-consuming country, China's economy will also have some impact on the international oil price fluctuations. Therefore, the study of relationship between economic growth and oil price fluctuations has great practical significance for the timely adjustment of the oil pricing mechanism and the development of an effective security strategy.This paper reviews relationship between the international oil price fluctuation and economic growth which made by the domestic and foreign scholars before. Then describes this paper's research background, content and methods, form the structural frame map. Before conducting empirical research, this paper first reviewed and analyzed the basic theory of oil price fluctuations and economic growth, including the theory of oil price fluctuation associated with price theory, multiple equilibrium theory, theory of supply and demand balance, and the theory of economic growth associated with Hansen economic growth model, Harrod-Domar economic growth model, Solow growth model. This part focuses on the mechanism between oil price fluctuations and economic growth, including oil price fluctuations on macroeconomic and microeconomic effects and economic changes on oil price fluctuations effects. In order to get a further understand on oil price fluctuations, the paper also analyzes the history and future of oil price fluctuations, and the factors that impact the fluctuation: supply, demand, inventory, and other unexpected events. Based on the theoretical analysis, the paper gives an empirical research to the mechanism between oil price fluctuations and economic growth of China, which consists of two parts:Firstly, the relationship between international oil price and China's oil price. Secondly, the relati- onship of the growth of our economy and the international oil price. The results show that our oil price almost perfect tracking of the international oil price movements; international oil prices and China's PPI two-way Granger causality, but with a one-way Granger cause CPI; There is a long-term equilibrium relationship between the international oil price and China's economic growth. International oil price fluctuation on the strength of our economy, but China's economic growth on the international oil price fluctuation are very small.The conclusions of this research further indicates that China must take appropriate measures to cope with the adversely effects that international oil price fluctuation on China's economy. The advices include the transformation of economic growth mode and improvement of oil strategies. Finally, this paper presents some advices about the transformation of economic growth and China's future oil development policy.