The Spillover Effect Of The US Exit Quantitative Easing Policy On China's Economy

Since the outbreak of the global financial crisis in 2008,the economy of the western developed countries led by the United States has been severely damaged,and the number of unemployment has surged.In order to restore economic growth and achieve economic recovery,the US has implemented four rounds of quantitative easing monetary policy in six years.The repeated use of quantitative easing policy has provided a lot of liquidity for the US and global markets.It not only effectively alleviated the financial panic caused by the financial crisis,but also caused a large amount of liquidity to promote the recovery of asset prices and economic growth,lower real interest rates,stimulated consumption and investment But with the gradual economic recovery in the United States,the economic index is getting better and the withdrawal of quantitative easing has been put on the agenda by the Fed.Considering the US as the world's largest economy and the international monetary position of the US dollar,the change of US monetary policy will not only play a significant role in the domestic market,but also bring many uncertain effects to the global economy.As an important trade partner of the US,China has close economic and financial contact with US.The exit of quantitative easing by the United States is bound to have an impact on the Chinese economy.Therefore,how the US withdraws from quantitative easing,what impact it will have on China when it withdraws,and what measures China should take to actively respond,these are the issues that this paper will study.This paper is divided into five chapters,focusing on the spillover effect of the United States withdrawing from quantitative easing policy on China.The first chapter mainly introduces the background and meaning of the topic,and summarizes the literature review on the quantitative easing policy spillover and transmission,the exit strategy and effect of quantitative easing policy.The second chapter introduces the related concepts and theoretical basis of the article,defines the concepts of quantitative easing,spillover effect and other related terms,introduces the theoretical model of monetary policy spillover under the open economy,and analyses several channels of the monetary policy spillover.The third chapter uses the data of relevant economic indicators to analyse the timing of the US withdrawal from quantitative easing,as well as the exit steps and exit tools of quantitative easing.It also briefly analyses the economic impact of the US exit quantitative easing on China through actual economic data.The fourth chapter is the empirical research part,selecting variables to establish VAR,using impulse response and variance decomposition to analyse the impact of the US exit quantitative easing policy on the Chinese economy.The results show that the US withdraw from quantitative easing,promote China's export,inhibit China's import demand in the short term,but in the long term promote China's import,accelerate China's capital outflow,and have an adverse impact on asset prices,which is bad to maintain the independence of China's monetary policy.The fifth chapter is based on the empirical conclusions,and China can take some targeted measures to cope with the withdrawal of quantitative easing from the United States.