The International Financial Crisis Context Of The Risk Of Deflation And Strategies,

The American financial crisis has become a global financial crisis, spreading from the financial sector to the real economy, from developed countries to developing countries, and the global economy was falling into recession. Under the international financial crisis's influence, Chinese economy was facing unprecedented impacts and its original trajectory has been changed significantly. From September 2008, the deflation pressures have strengthened and the deflation trend was clear in February 2009.The seasonal adjustment monthly CPI increase rate became minus from February,2009 to October 2009, which witnessed a mild deflation in China. At this stage, Chinese economic growth rate was slowing down, the uncertainty and complexity of economy has increased and the structural contradictions were highlighted. In response to the deflation and the economic downturn, the Chinese government implemented a series of macro-control policies to stimulate the economy from November 2008. Finally China got rid of deflation successfully in the end of 2009, the real economy was recovering, prices kept increasing and the inflation expectations began to increase, but the inflation has not become reality so far.The deflation in China is an emerging thing after China's reform and open policy, and the real deflation occurred in 1998-2003,which was similar with this deflation——the exterior impact was the blasting fuse, and had big negative effects to the economic development. This article is in the foundation of existing domestic and foreign research results, uses empirical methods to analyze this deflation origin, and concludes experience from deflation cases. But it not limited to deflation studies, but proposed polices and recommendations when the deflation pressures subsided gradually and the inflation expectations were increasing.