The Effect of International Oil Price Fluctuation Based on Disentangling Shocks on Chinese Industries:1998-2015
(2.School of Economics,Nanjing University, Nanjing ,China 210093)
(3.School of Economics,Peking University, Beijing ,China 100871)
【Abstract】Based on the structural vector auto-regressive (SVAR) model with short-term constraints, the paper analyzes the effects of three types of structural shocks that lead to international oil price fluctuation on 37 Chinese industrial sectors from 1998 to 2015 and the mechanism behind such effects. The findings are as follows. Firstly, the oil price rise caused by supply shocks, oil-specific demand shocks and financial speculation shocks inhibits industrial output. In particular, the industries with higher energy intensiveness or a higher proportion of state-owned enterprises’ (SOEs’) production face smaller inhibitory effects. Secondly, the oil price rise caused by aggregate demand shocks increases industrial output. In particular, the promoting effect of domestic demand shocks on output is higher than that of foreign demand shocks, and the promoting effect of emerging-economy demand shocks on output is higher than that of developed-economy demand shocks. In terms of industries and foreign trade China is highly complementary to developed economies, but in fierce competition with emerging economies. When China’s industries have higher export dependence, the positive influence of foreign demand shocks and developed-economy demand shocks on China will be greater, but that of domestic demand shocks and emerging-economy demand shocks will be smaller. Thirdly, the inhibitory effects of oil-specific demand shocks on Chinese industrial sectors are much greater than those of supply shocks and demand shocks. To cope with the negative effects of oil price fluctuation effectively, China needs to change the pattern of economic growth, improve the pricing mechanism for refined oil and build the crude oil futures market and the system of energy finance.
【Keywords】 oil price shocks decomposition; industrial sectors; energy-intensive degree; degree of dependence on export;
(Translated by ZHANG Yan)
. ① Foreign dependence is the proportion of the net import in the apparent consumption which is equal to the sum of net import and domestic oil output. [^Back]
. ① Given the availability of data, the time span for growth rate of value added of light and heavy industries is from January 2006 to August 2013. [^Back]
. ② As the oil consumption of every industry cannot be obtained, the intensiveness degree of energy consumption is adopted to substitute intensiveness degree of oil consumption. [^Back]
. ① The data from World Energy Institute and U.S. Energy Information Administration show that the energy consumption per unit GDP in emerging economies such as Brazil, Russia, India and China is higher than the average level of European Union and Organization for Economic Co-operation and Development. [^Back]
. ② The output of top five industries with highest energy intensiveness is increased rather than decreased, mainly because despite the high energy intensiveness of ferrous metal smelting industry, rolling and processing industry, water production and supply industry, nonmetallic mineral metal product industry and electric power and heat production and supply industry, these industries mainly use coal and other energy, so they are posed no influence of the oil price and supply. [^Back]
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