The Research On The Problems And The Countermeasures Against Deflation And Inflation In China

Deflation is a phenomenon of successive decreasing in the general prices of goods and services. Chinese economy has appeared a mild deflation since the latter half of 1997. But since the latter half of 2002 Chinese economy has developed with a high growth rate again. The price of the commodities, from energy, raw and processed materials to foodstuff, has begun increasing successively. Chinese economy appeared a sign of inflation. In his period, there are many different opinions among Chinese economists about how to develop the macro economy of our country.The transformation of Chinese economy from the successive deflation to the current over-speed economic growth reflected the instability of Chinese economic development. If the effective measures were not adapted to control and guild this situation, the problem would make negative influences to the favorable development of Chinese economy. In this sense, how to adapt the effective measures, which ensure that Chinese economy can develop in a healthy and steady way, has become one of the initial missions of Chinese macro economic policies. And this is also the problem that will be studied as an important aspect in this article.By reviewing Chinese economic developing process from 1997 to the present, the cause of the transformation of Chinese economy from deflation to inflation and even the alternation and simultaneousness of the two phenomenon in short-term which made Chinese economy can not develop healthily and quickly will be unveiled. In this article I also will bring forward some countermeasures that would overcome the instability of Chinese economic development from the views of the industrial development, the regional development, the monetary policy and the fiscal policy.There are mainly four parts of study in this article: First, by studying the theories about inflation, deflation and overheated economy, find out the mechanism and the related theories foundation about the transformation of inflation and deflation. This is one of the nodules and the point of innovation of the study in this article. Second, by concluding the situation of Chinese economic running, find out the law of the transformation of Chinese economy from deflation to inflation and even the alternation and simultaneousness of them. Third, on the base of above-mentioned study, find out the essential cause, characteristics of the above-mentioned phenomenon and the influence to Chinese economic development. Fourth, bring out the countermeasures and suggestions from several aspects.In this article, some opinions from Economics and the related domestic achievements of research have been used. But citing is for innovating, developing the theory and solving the problems of self. This is why the problem about transformation of inflation and deflation has been chosen as the object of research. The core of this article is just hoping that bring out the countermeasures to overcome the instability of Chinese economic development by studying this problem.