Transmission Effect between PRC International Trade Credit and Its Monetary Policy

Credit rationing is an important manifestation in the monetary policy transmission. This paper focuses on the analysis of the transmission effect of China´s international trade credit on the monetary policy in the foreign trade domain, and with empirical evidences we come to the conclusion that the international trade credit assets is the Granger cause of export, and still further that the volume of international credit assets is positively correlated with exports. Likewise, international trade credit liabilities and imports are in positive correlation as well; yet they are reciprocal Granger causations to one another. The conclusions above can be applied to realize the balance of China´s international payments via credit rationing.