Import Demand of Crude Oil and Economic Growth in China: Evidence from the ARDL Model

In order to quantify the demand elasticity of China's imported crude oil, a long-run stable relationship is estimated among the crude oil import, income and crude oil prices by the autoregressive distributed lag (ARDL) bound testing approach over the period 1999-2009. Empirical results show that the short and long-run price elasticities of imported crude oil are positive and inelastic, and the long-run income elasticity is near unity. Moreover, a stable equilibrium is established between the imported crude oil and its determinants by adding a break point into the model and providing evidence of the liability of the obtained elasticities. Finally, the corresponding reasons for the conclusions are presented.