Mechanism Of China’s Imported Inflation Conduction

Nearly a decade, China has experienced three times more significant inflation, investigate the causes of inflation has also been a domestic academic research focus. And since the beginning of2010a new round of inflation, its conduction mechanism is caused widespread controversy academia, in a variety of views and opinions, the more there is a representative view of the current round of inflation is considered a significant input type inflation characteristics. In view of this, the paper decided in the international capital flow theory, monetary theory of supply and demand, exchange rate theory, the price transmission theory, based on the theory of international payments adjustment further analysis conduction imported inflation from international commodity price transmission mechanism and the conduction of international capital flows the impact of international factors on inflation in China imported two aspects mechanism.Combined with the global economic crisis, the use of2000-2013were the years of the data on inflation characteristics, analyzes the characteristics of inflation, inflation in the comprehensive study of basic theory and the conduction mechanism, from international trade and international capital flows, the two aspects of imported inflation factor for detailed analysis.In addition, the use of2000-2013international market spot price index CRB, industrial producer price index MPI, Brent crude oil futures prices for the monthly energy index, CBOT soybean futures price index as a monthly food index, the RMB against the U.S. dollar ER, PPI PPI, the broad money supply M2, of China’s consumer price index CPI, foreign direct investment FDI, respectively, from the two conduction mechanisms for the establishment of a vector autoregression (VAR) model, using Johansen cointegration test, Granger causality test, impulse response function and other methods, empirical conclusions drawn imported inflation transmission mechanism. The results show that the current round of inflation is mainly through international capital flows and exchange rate fluctuations resulted in an increase in our foreign currency reserve assets thus broadening the base money supply passive form impact on the overall price level in China. Interaational commodity prices on inflation in China conduction is not significant, China’s inflation is conducting more capital comes from international sources, rather than international trade transmission mechanism.Finally, by summarizing the empirical results of imported inflation combined with our current economic characteristics were analyzed, and then raised the price reform of resource products to promote, accelerate and improve the RMB exchange rate formation mechanism, strengthen supervision and improve cross-border capital flows, capital flows and other regulatory systems policy proposals to deal with imported inflation.