China's Economic Transition "money Missing" Problem Research

Since China's economic transition and system reform, there has long been a mystery of"missing money"in the macro-economic function. It is the result of so many conflicts in China's economic transition and financial reform. Furthermore, the mystery of"missing money"also resulted from China's economy development and macro-economic management. It is the reflection of those changes in supply of money. In this point, we must put this special phenomenon in the whole special historical period of China, in which China is undertaking its economic transition and financial reform. And only by doing this, can we research and explain the mystery of"missing money"more clearly and reasonably.Since 1978, China has gone through its economic and financial reform gradually, and many big changes occurred in China's economic field, especially about the changes in so many aspects, such as the price-system, tax-system, financial-system, foreign-exchange management as well as social insurance system, ect. In a word, China's economic system has been changing from"planned-oriented economic system"to"market-oriented economic system".However, as the development of China's economic transition and financial reform, a puzzling phenomenon occurred in China's macro-economic function. It had shown its performance as follows: the relationship among economic growth, supply of money and price level had run out of their way. The total increase of money-supply didn't lead to the rising of the commodity prices as well as the growth of its economy. At the same time of finance reducing, the increasing rate of money-supply was much higher than the economic growth rate and the inflation rate. Even the traditional money quantity theory could not account for this abnormal phenomenon. Thus it is called by foreign professors the"Chinese mystery", that is the mystery of"missing money".