Research On The Spillover Effect Of The Quantitative Easingmonetary Policy Of Japan On China’s Output

With the process of economic and finance globalization, the economy is closely related with the amazing breadth and depth. As a important neighbor of China, Japan is not only related with China in the political, cultural and historical aspects; and Japan is an important trade partner of China, the economic ties between the two is very close. Accordingly, the monetary policy influence between the two is mutual and deepening. Since 2001 the implementation of quantitative easing monetary policy for the first time, the impact of monetary policy on China’s economic development has gradually emerged, this article will focus on the differences of the spillover effect of Japan’s quantitative easing monetary policy in China as well as the area in the east region, the western region, overflow region.Firstly, this paper reviewed the Mundell- Fleming- Donne Bush(MFD) model and the new open economy macroeconomic model(NOEM), carding the theoretical basis of monetary policy spillover effects, introduced the occurrence mechanism and effect analysis of the spillover effects of monetary policy, and pointed out that the channels of spillover effect: the interest rate channel, asset price channel, exchange rate other channels, trade channels and psychological expectations channel. Secondly, the third chapter reviewed the practice of Japan two rounds of quantitative easing monetary policy, including the specific operation and the implementation effect of monetary policy. Again, the fourth chapter used the Japanese M2 growth rate, China’s industrial added value growth rate, bank overnight lending rate, the growth rate of imports, exports, the yen against the RMB exchange rate, China’s CPI, VAR model, empirical found that Japan’s quantitative easing monetary policy to China’s spillover effects exist, the direction of the positive and negative, including interest rates, exchange rate, trade, asset prices, which is a important impact on the import and export trade. Finally, the fifth chapter used China’s eastern, central and western regions GDP as a reflection of the output variables, were substituted into the fourth chapter based on the model. The empirical result showed that: Japan’s quantitative easing monetary policy existed in our country east, central and western regions output spillovers, in a relatively short period of time, spillover effect was positive, after a period of direction presents a trend of alternating positive and negative; spillover effect of the eastern area of China’s output was the strongest. In the western region output spillover effect was the weakest, spillover effects on the output of the central region generally.In order to deal with the spillover effects of quantitative easing monetary policy, the paper put forward the following policy recommendations: strengthening the coordination and cooperation with Japan and other countries, considering the spillover effects of monetary policy to the cooperation and win-win situation. In order to achieve win-win cooperation of the situation; improve the level of regulation and control of the central bank’s monetary policy; strengthening the construction of the exchange rate system, protect the stability of the exchange rate level; optimizing the import and export trade structure; co-ordinate East, middle and west area coordinated economic development.