The Influence Of The US Quantitative Easing Monetary Policy On China’s Economy By The Empirical Analysis

After the outbreak of the financial crisis in2007, the economy of many countriestook a hit. In order to stabilize the financial markets and stimulate the sluggish economy,a lot of governments have taken the corresponding measures quickly.However,thisaction did not achieve the satisfactory effect. When lots of countries in the world sufferfrom the budget deficit and the trouble of issuing the national debt,as well as interestrates which has dropped to near zero, these countries began to break the routine andimplement the quantitative easing policy, especially the"quantitative easing" policytaken by the United States. The United States have implemented a round of quantitativeeasing since2008. Due to the dollar which is the international reserve currency andcommodity currency, America’s quantitative easing policy will not only affect its owneconomic, and will also affect other countries. So it has become the research hot spot tostudy the impact of U.S. quantitative easing policy to the rest of the economy.In this paper, by using the literature research and empirical analysis, focusing onthe influence of the quantitative easing policy on China’s economy,we put forwardcounter measures and suggestions. At first, this article expounds the function of the“quantitative easing”policy theory,and analyzes the differences between the quantitativeeasing policy and the traditional monetary policy, as well as the quantitative easingpolicy transfer mechanism.Secondly,analyzing the detailed the background,deep reason,content, characteristics and innovative operating tools of America’s quantitative easing.Thirdly, when we establish the VAR model, impulse response function,variancedecomposition and Granger causality test, we can conclude the influence of the U.S.quantitative easing policy on China’s import and export, price level, money supply,interest rate, exchange rate and foreign direct investment through trade channel, policychannel and capital flow channel.Then analyzing the empirical results. In the empiricalconclusion, America’s quantitative easing policy has positive influence on China’sexports and imports through the trade channel.The quantitative easing policy causes therise of price level and affects the independence of monetary policy of China. In terms ofcapital flows, the quantitative easing policy plays a promoting role in the foreign directinvestment of China. Finally, according to the influence of the U.S. quantitative easingpolicy on China,we put forward some policy suggestions.