The Spillover Effect Of The Quantitative Easing Monetary Policy Of The United States On China’s Output

The outbreak of the American "subprime crisis" in2007rapidly evolved into aglobal economic crisis. The Chinese government has promulgated a series ofpolicies to deal with the crisis and make a recovery. All countries in the worldalso did the same thing to get rid of the crisis. The United States is at the top ofthe GDP rank in the world and very close to China in the economy. So it is agreat influence on our country that how the United States deals with it. Inresponse to the economic crisis, the Fed used quantitative easing monetarypolicy and a set of other measures by issuing massive amounts of liquidity tofinancial markets to stabilize the financial market and restore people’sconfidence. The policy of the United States did give a great effect and make arecovery in the economy. However, the exterior is very worried about othereffects of the policy, especially the worldwide uncertainty which came with thehuge liquidity.China’s economy has a steady recovery, and is facing with the structurallyindustrial updating and try to break “Middle Income Trap”. At this moment, theuncertainty which was caused by the quantitative easing would be anunexpected risk of the economy and society in China in the future. So theresearch and analysis of quantitative easing monetary policy is particularlyimportant for our country to cope with it properly and predict the futureeconomic situation correctly. This paper is based on the details of Americanquantitative easing monetary policy and analyzes the effect on China. In theend, countermeasures and suggestions will be brought on.