Spill-over Effect Analysis Of American QE Monetary Policy To Chinese Stock Market

Shocked by the global finance crisis2008, to recover economy of own country, the western country, especial America, most adopt QE monetary policy to stimulate the economy of own country and decrease the unemployed rate and avoid monetary tighten, to achieve the aim of developing economy. But the effect is not so good, however injecting huge money to every country. Especially, American adopt4times QE monetary policy from November2008, total injecting2000billon dollors money to economy body. At the background of US dollor as the major reserve currency, American QE monetary policy must effect the world economy greatly, huge "hog money" will flow into the developing country, caused the inflation and bubble of asset price.China and American are second trade country each other, they are closed related on economy, finance and politic area. Nowadays, Chinese finance market open gradually, Chinese capital market become idea market of "hot money" to get profit. So the money from American QE must hit the Chinese capital market, and caused the stock market fluctuate severely and give rise to finance risk.By the end of2013, FED start to quit the QE, the liquidity will shrink, the "hot money" will flow out from developing country, hit every country greatly, So, at the time of quit of American QE monetary policy, to analyze the effect of American QE monetary policy to Chinese capital market price, can help to understand and hand the potential finance risk, especially in the period of economy transformation, this is important to keep the Chinese economy stablity.So, when studying the spill-over effect of American QE monetary policy to Chinese stock market, firstly, from the angle of theory, illustrate the relationship of monetary and stock market, and study the conduct way of spill-over effect, and explain the effect way from American QE monetary policy to Chinese capital market price. Later, from the angle of qualitative, look back the content of4times QE of American and the effect to American and international market. In demonstration aspect, the paper base the VAR model, verify the spill-over effect from American QE monetary policy to Chinese stock market, and use the ECM model to study the conduct way and the degree, found that the stock relation effect are greater. Last, the paper prospect the quit way of American QE monetary policy, and analyze the potential effect, and give some suggestion how to deal with the quit effect of QE. We can conclude through demonstration analysis as below.Firstly, through demonstration analysis, explain the huge liquildity from QE effect Chinese stock market certainly, at the same time, the effect of American monetary policy are more distinctness to Chinese stock market than FED rate, so we can speculate the quit of American monetary policy would affect Chinese stock market greatly.Secondly, through studying conduct way, we found that American QE policy have certainly effect to Chinese M2, So we can say American monetary policy have certainly effect to Chinese monetary policy, At the same time, Chinese M2have little effect to Chinese stock market, the liquildity flow into Chinese real estate market, may caused bubble risk of real estate market.Thirdly, comparing two conduct way, we found that the conduct more efficient of monetary policy, American stock market affect Chinese stock market not obviously.So we can give some suggestion as below, in short-term, enlarge the elasticity of RMB exchange rate, strength the monitor of short-term money and hot money, and adopt flexible monetary policy; in long-term, defuse the domestic economy risk, enhance the ability of counteracting risk, and push the process of the RMB internationalization stability.