A Research On The Spillover Effects Of The U.S.Quantitative Easing Monetary Policy On The Sino-US Trade

In the spring of2006, the U.S. sub-prime crisis appeared. In August2007, major financial markets all over the world began to suffer, and monetary authorities started to introduce related macro-control policies. However,"liquidity trap" soon emerged, the traditional monetary policy failed. Under this background, the quantitative easing monetary policy, as an innovative and unconventional means of macroeconomic regulation, had been adopted by the Federal Reserve. On November25th,2008, the Federal Reserve announced it would buy agency debt and mortgage-backed securities, which marked the beginning of the QE, and after four rounds of QE, since January2014, the Federal Reserve began to reduce the size of debt-purchasing, which marked the Federal Reserve had began to withdraw from quantitative easing gradually.On one hand, China’s accession to WTO in2001and exchange rate reform in2005make it tie with the world closer, and the implementation and exit of the Fed’s quantitative easing monetary policy will produce a series of spillover effects on China. By the end of2013, the two countries are still each other’s second largest trading partner, and until late April2014, China is America’s largest source of imported goods and the third largest export destination, which has been America’s the fastest growing exports markets for10years. Therefore, it’s important and necessary to study the impact of quantitative easing monetary policy on Sino-US trade. On the other hand, since the European debt crisis, the EU launched the "Euro QE", the Bank of Japan also decided to implement the "qualitative QE" in April2013, this study will also provide some reference to cope with the two country’s policy.Based on the Sino-US trade, the dissertation extents the time span, from the beginning of the quantitative easing policy to its withdrawing today, and use vector autoregressive model to study the QE effects on Sino-US trade. First of all, after a comprehensive reference to the existing research results, this dissertation gives the definition of QE in contrast to the traditional monetary policy and credit easing policy. Secondly, it systematically presents starting and ending time and specific content of4rounds of the quantitative easing monetary policy and its exit, then, reviews the policy effects briefly. Thirdly, the dissertation analyzes the impact of QE implementation on Sino-US trade from the aspects of interest rate, exchange rate, International commodity prices, foreign direct investments, US economic recovery. We should consider it from aspects of positive and negative, long-term and short-term. Next, the dissertation makes an empirical analysis by establishing a vector autoregressive model. By using variance decomposition and impulse response function, it concludes that among the selected indicators, the Fed’s total assets, International commodity prices, foreign direct investments are the most significant. Finally, the dissertation gives the corresponding policy suggestions from5aspects--weaken the shock of the international commodity price fluctuations, regulate and guide the international capital flow, transform economic growth mode, accelerate the RMB internationalization, enhance China’s finance strategy ability, etc.