Research On The Spillover Effects Of China's Monetary Policy On The Belt And Road Countries

With the first batch of cross-border trade RMB settlement pilots established in 2009,the process of RMB internationalization was officially launched.Over the past decade,the internationalization of RMB has been accelerating and China has gained many remarkable achievements.Thus,at the tenth anniversary of RMB internationalization,it is of great significance to consider the strategy together with the Belt and Road Initiative proposed in 2013,and assess the influence of RMB on the related countries.This paper focuses on the spillover effects of China's monetary policy on the economic development of the Belt and Road countries.After collecting relevant literature,the paper concludes the transmission channels and mechanisms of monetary policy spillover effects on the basis of the Mundell-Fleming-Dornbusch model.The result shows that it is difficult to judge the directions of the spillover effects theoretically.Thus,the paper uses a fixed effect panel model and a panel vector autoregressive model to illustrate the existence and heterogeneity of the actual spillover effects in the Belt and Road Initiative region from static and dynamic perspectives,and then proposes several advices.This paper draws the following conclusions: China's monetary policy has spillover effects on the economic growth of the Belt and Road countries,the quantity-based monetary policy instruments have bigger effects than the price-based tools,China's reduction in real interest rate and monetary supply can boost the economic development of the Belt and Road countries.As for the transmission channels,exchange rate channel plays the biggest role,while the trade channel generates a relatively small promotion.After grouping samples by trade dependence and currency cooperation,the paper finds that the promotion effects of China's reduction in real interest rate will last longer and the reduction in China's money supply will better promote the economic growth of the Belt and Road countries.By portraying the linkage effects of China's monetary policy with the economic performance of the Belt and Road countries.This paper hopes to emphasize that,with the increasingly open financial environment,the implementation of monetary policy should coordinate both domestic and international influences,show the image of a responsible big country,and stablely promote the internationalization of RMB.