The Impact Of International Crude Oil Price Fluctuation On China 's Macro - Economy

China’s modernization needs more and more oil resource, which is one of troubles to face and solve for every country experiencing industrialization. As the second-largest economical entity and oil-consumption state of the world, the requirement for crude oil is increasing year by year, and the world crude oil price plummeted from140dollar per barrel in2008to40dollar per barrel in2009, and the price shocked near95dollar per barrel in2013, the huge shock in price make China which is going to adjust economy structure face lots of challenges, meanwhile put large intervention on China macro-economy growth.This paper investigates how does China’s macro-economy response to the world crude oil price shock, applying a structural dynamic factor model approach based on China monthly macroeconomic indicators from January2005to January2013. Main conclusions are the following. Producer price index and corporate goods price index are raised due to cost effect and purchase management index which is viewed as one of macro-economy indicators is also raised limitedly in first months, but gets down after8months, consumer price index gets influence tightly by comparison due to coal-dominant structure of energy consumption and price transmission mechanism regulated by government, at the beginning of world crude oil shock, the central bank preferred to tighten monetary policy.By more complicated political world and more excess liquidity, the politics and finance nature of world crude oil become dominant clearly, the most important thing for China is to decrease the oil consumption rate and enhance dependence of oil by advanced technology, while owning power in world crude oil pricing by establishing the crude oil future market.