The Influence Of International Commodity Price Fluctuations On China’s Price

After the financial crisis in2008, all of the countries in the world actively take the policyto promote the economic recovery, including world economic power-the United States.After the implementation of quantitative easing, the increase in money supply leads todepreciation of the dollar. And devaluation of the dollar makes international commodityprices fluent strongly. Because China is in the stage of urbanization and industrialization,demands for basic raw materials and some important commodities are large. But China’sdomestic supply can’ not meet such needs. So we need compensate for the lack of supplythrough imports. And then the dependence on international commodity becomes strong. Inthe long term, commodities are the primary products and demand elasticity is small. BecauseChina is in the momentum of rapid economic development, the arising of the commoditiesdemand must not decline. The international transmission of this volatility through price leadsto the inevitable pressure on China’s macroeconomic performance. In the context ofquantitative easing, doing something to analysis the impact of commodity price fluctuationson the price level in China, and reduce this impact through proposing effective measures to issignificant to maintain the stable development of China’s rapid economic.Firstly, the paper has an overview of the volatility of commodity prices. Parts1,respectively, describe the contents of the international and domestic commodity prices,features, index and fluctuations in the status quo, and have a comparison of international anddomestic commodity price index. The second part is to tell the point of price level, and to tellthe price level measurement in detail, and to describes the status quo of China’s price level.The third part is the academic basic about the relationship. Part IV is based on the theorybefore, having the empirical test using data on prices index and commodity price indexfluctuations. Part V is on the basis of the above argument to make policy recommendationsabout this phenomenon. Through industrial restructuring, paying more attentions tointernational commodity prices and regulating the commodities market, establishing amonitoring and early warning systems, we try to reduce the impact to make the economicdevelop better.