Based on monthly data and VAR models from March 2002 to December 2015,
this paper studies the interaction between international commodity price and China’s
demand. The results show that the impact of China’s demand can to a certain
extent guide the fluctuation of commodity prices, while this impact is
insignificant. Over time, the shock of commodity prices has exerted an
increasingly effect on the changes in China’s demand. In the context of the
drastic drop of commodity prices and the slowdown of international economic
growth, China should pay close attention to other factors that affect the
volatility of commodity prices, such as speculative investment factors, the
monetary policy of the world’s major economies and take full advantage of today’s
low commodity prices and take muscular internationalization approachto
buying important commodities cheaply for eventual global market improvement and
selling on the macroeconomic trendlines.
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