The newly-established Prediction Science Research Center of China Academy of Sciences 16 released the latest forecast report, saying that the rise in international crude oil prices will have seven major impacts on China, including reducing China's real GDP and increasing China's inflationary pressure.
This paper comprehensively analyzes the impact of international oil price fluctuation on China's economy and the impact of oil price fluctuation on residents' welfare through special models and data, and draws the following seven conclusions:
-The increase in international crude oil prices will reduce the gross domestic product. A 50% increase in oil prices will lead to an increase in foreign exchange expenditure, a decrease in exports by 1.468%, a decrease in investment by 0. 106% and a decrease in consumption expenditure by 0.206%, thus reducing the total real GDP by 0. 137 percentage points.
-Rising oil prices will upset the trade balance. The international crude oil price rose by 50%, and the RMB exchange rate fell by 0.636%. The devaluation of RMB will make imported goods expensive and exported goods cheap, thus reducing the real income of China and worsening the balance of payments situation of China.
-Rising oil prices will increase the cost of enterprises that use oil as fuel or raw materials, and increase the pressure of inflation in China. China's domestic demand for crude oil imports continues to rise, and high oil prices directly lead to an increase in the cost of purchasing crude oil, which ultimately needs to be borne by all walks of life in China, thus reducing industry profits and delaying domestic investment.
-the rise in oil prices will make exports face the potential danger of decline. First, the products with oil as the main fuel and raw material, due to the rising production cost, lead to the decline of product competitiveness, so that exports are facing the potential danger of decline; Second, export-oriented countries have difficulties in balance of payments due to rising oil prices, thus reducing their import capacity. When the international oil price rises by 50%, China's exports will drop by 1.468 percentage points.
-Rising oil prices have different effects on the welfare of rural and urban residents. Generally speaking, rising oil prices will reduce the welfare of both types of residents, but the welfare loss of rural residents is greater than that of urban residents, and the welfare loss of the former is faster than that of the latter.
-The rise in international crude oil prices makes the prices of crude oil and refined oil products with crude oil as the main raw material rise, which promotes the flow of labor and capital resources to the oil exploitation field and is conducive to the development of China's oil industry. In addition, the increase in international crude oil prices will reduce the energy demand per unit output, promote China to save energy consumption and improve energy utilization rate, which will help alleviate the contradiction between oil supply and demand in China.
The rise in oil prices will push countries to make more efforts in technological progress. Technological progress plays an obvious role in resisting oil price risks, especially in petrochemical and transportation fields. Low-level technological progress in petrochemical and transportation sectors can completely eliminate the negative impact of oil price increase on real GDP when the oil price increase does not exceed 20% and 50% respectively. High-level technological progress can ensure that real GDP will not be affected even if the international oil price increases by 100%.