A Study On The Impact Of International Oil Price Fluctuations On China's Real Economy

During the rapid development of China's economy,oil is one of the important energy resources needed in the economic development.Changes in oil prices largely affect economic activity that is strongly linked to oil.According to the data,China consumes more and more oil every year.The fluctuation of oil price will be closely related to the smooth progress of China's development strategy.The research and analysis of the effect of international oil price on China's real economy is of positive significance to China's relevant policy making.Firstly,the pricing standard of international oil price is explained,and the west Texas light oil(WTI)price is selected as the international oil price mentioned in this paper.Secondly,the concept of the real economy is defined,and the real economy and the virtual economy constitute the whole economy.At the same time,it also analyzes the fluctuation of international oil prices and the current situation of China's real economy.International oil prices rose rapidly,reaching $70.76 per barrel in October2018.There must be a certain relationship between the real economy and the virtual economy.Therefore,this paper analyzes the development of the real economy and the virtual economy,and finds that the proportion of the real economy in GDP is decreasing,while the proportion of the virtual economy in GDP is increasing.Mechanism analysis on the impact of the international oil price fluctuations on the real economy,mainly from the cost impact effect,demand shock effect,wealth effect and the effect of the monetary policy analysis of these four aspects,and think that if international oil prices rise,so the production cost of enterprise is likely to increase,thus,enterprise profit will reduce inputs enterprise production scale getting smaller,thus reducing investment;If the international oil price rises,the price will also rise to some extent,and the residents will reduce their consumption accordingly,which will have a negative impact on the consumption demand.If the international oil price rises,the import cost will also increase,and the export will be inhibited,which will lead to the change of the total output and the total demand,which will lead to the transfer of the country's overall wealth.If the international oil price rises,it will causeinflation.In order to curb inflation,the relevant government departments will implement the tightening monetary policy,that is,reduce the money supply.Based on theoretical analysis,in October 2013 to September 2019 monthly data as sample,using the parameter quantile regression model and nonparametric quantile regression model both econometric model analysis method,analyzed the influence of international oil price fluctuations on the real economy GDP,as well as from a cost impact effect,demand shock effect,wealth effect and the effect of the monetary policy analysis of selected variables,the four aspects respectively analyzes the international oil price fluctuations in investment,consumption,exports,and the influence of the money supply.The empirical analysis has drawn the following conclusions: first,the international oil price has a "m-shaped" nonlinear effect on the GDP of the real economy;Second,the international oil price also has a "m-shaped" nonlinear effect on investment.Thirdly,the international oil price has an inverted "u-shaped" nonlinear effect on consumption.Fourth,international oil prices have a "m-shaped" nonlinear effect on exports.Fifth,the international oil price has an inverted "U-shaped" nonlinear effect on the money supply.Based on the above,and combined with the actual economic operation in our country,explained why the international oil price fluctuations on China's real economy,investment,consumption,exports,and inhibit or promote the role of money supply,and according to the actual situation of China's economic development explains why the international oil price fluctuations on China's real economy effect and the influence of the theory.Finally,according to the theoretical and empirical analysis results,and combined with the analysis of the conclusion,four Suggestions are given: change the economic growth mode,reduce the excessive dependence on investment and foreign trade;Improving the domestic oil pricing mechanism and strengthening the domestic oil pricing capacity;Increase investment in scientific and technological research and development to improve oil supply capacity;We will foster the concept of energy-saving consumption and promote the research and development of new energy sources.