TAN Xiaofen,REN Jie:China Factor in Price Fluctuations of International Bulk Commodity

Abstract  This paper uses recursive VAR model and monthly data from January 2000 to July 2013 to investigate what determine the international commodity price fluctuation and the importance of China factor. The results show that economic growth and monetary liquidity rather than supply are the main drivers of international commodity price. The impact of China factors on different commodity prices is significantly different. Chinese demand is more significant and persistent than that of OECD in some commodity such as copper, aluminum and zinc, but Chinese money supply is less significant and persistent than that of OECD in most commodities. Financial crisis changed the operation of international commodity market due to the fact that in the period of crisis the demand of developed countries and quantitative easing monetary policy has bigger effect on international commodity price.

Key words： International Commodity Price    Aggregate Demand    Global Liquidity    China Factor

Source: Finance & Trade Economics , No.10, 2014