Research On The Formation Of Deflation In China

At a time when we are applauding for saying good-bye to shortage and entering buyer抯 market, one phenomenon that has never been considered and has long been overlooked by world of theory----deflation, even harmful deflation has come about silently. Four times of inflation have happened one after another since the beginning of Chinese reform. People are used to getting along with inflation and also have a lot of knowledge about causes of inflation. Many inland literatures had demonstrated its system causes 慳nd mechanism causes systematically as well, pointing out the necessity of inflation under planned economy system. Accordingly, deflation had been looked as an impossible phenomenon at planned economy ages because traditional planned economy was expanding not restraining in our opinion. Just before the coming of this worldwide deflation, there are very few special works aiming at deflation either in inland or at overseas. Only after this, deflation has been become a keen issue. Many works much more than people can attend to seemed as if came into being just one night. Although these works and papers each laid particular emphasis on one aspect of causes that induces deflation, they basically not mentioned or spoke little of the root cause----the changes of system and th?incomplete changes of system.Deflation used to be looked as a phenomenon that onlyappears in capitalist economy but why does it now occur inChina----a socialist country? Who is to blame for the deflation?Whether we could and how to prevent and cure the deflation?This article is planned to solve these above-mentionedproblems. After plenty of discussion, the author concludes that the original cause of this deflation is changes of system and its incompletely changing. They both bring up China抯 present deflationary situation. Therefore, we should put our greatest efforts on the perfecting of system and the bringing forth of new ideas to prevent and cure deflation.