Empirical Study Of Imported Inflation Influence On China's Inflation

In 1996, China's economic successfully "soft landing". Afterward the long lasting inflation ended. In the year 2000 there even occurred deflation, accompanied by a decline in production costs of scientific and technological revolution, people began to expect a new era of non-inflationary. Since 2003, the United States and Japan and other major economies, loose monetary policy and active fiscal policy stimulus, crude oil, raw materials, food prices rise across several industries. China was not spared in this globalized inflation. Compared to the high inflation in 1980s and 1990s, a prominent feature of this time is occurring in commodity prices caused by soaring global inflation backdrop. Since 2009, along with China's rapid economic growth of investment, excessive credit, the situation of excessive trade surplus, inflation in China is seeing a rise and spread the trend. Compared to other inflations on history, despite the seemingly similar characteristics, the background and the economic environment are very different. In the trend of economic globalization, China's growing domestic market continues to deepen ties with the international market, international capital flows occurred in the context of accelerating inflation; is also important in the global price level of subsistence production and the existed inflation under the circumstances of living expenses'lasting rising, with a lot of international input factors.Inadequate understanding of the causes of inflation is bound to affect the treatment effect. Thus requiring in deep analysis of the causes of this inflation, transmission mechanism, particularly international factors. This article is based on the analysis of the occurrence of this macro-context of inflation, imported inflation transmission mechanism of the theory, and their positions and actions in this inflation round. Studies of international factors causing domestic inflation and the role of specific pathways mechanism is conducive to the formulation of appropriate policies and measures, so as to effectively resist the adverse effects of international and to maintain domestic macroeconomic stability.Imported inflation is that in an open environment when the international market exists inflation, because a country's economy is closely related with the international market, such price increases by the country's ties with the international market, causing spread to domestic domestic prices in the country. This paper describes the basic meaning of imported inflation, structural and neo-structuralist theory of imported inflation, detailed analysis of the structural theory emerges in the new generation, maintenance and support mechanisms and the international transmission of imported inflation pathway analysis, divided into economic and mathematical models. And draws on the input of the transmission mechanism of inflation theory to analyze the occurrence of imported inflation conditions and specific performance. Based on the theory introduces, we analyze the highlighted imported characterized inflation, in order to test whether the imported factors are the main causing factors of inflation. Based on the theory, select the January 1999 to June 2011 monthly data on China's production of imported inflation, establish VAR model of involved maintain and support mechanisms, empirical results show that the input factors in the current round of inflation played a significant role, and proposed to ease some of China's imported inflation measures, from a strategic point of view the development of China's currency policies to improve China's current economic situation, a correct understanding of the current international financial situation, from a strategic point of view the implementation of administrative interventions, the transformation of economic growth mode, in order to grasp the economic lifeline of our country.This study has a valid practical background, theoretical analysis and empirical analysis using a combination of methods to study the characteristics of China's imported inflation helps economic agents to understand the causes of inflation and the current mechanism of governance. It can also provide policies to cope with inflation in the short and lons run.