China's Deflation Studies

There is a new tendency, which is the falling of the price in agricultural products, industrial products and materials etc. Deflation has become the main problem of the many developed countries. Under the above tendency, there is also a new problem our country. In 1995-1996, we have large achievements in macro controlling, but since October 1997,the rate of inflation becomes negative, national demand is insufficient, unemployment population increase. To the research on deflation, there is less study in term of theory than inflation, and we counter this problem in the process of reforming firstly. There is no consensus concerning about whether the globe and China face deflation, the concept of deflation and how to cure it. Through an analysis of definition of deflation and deflation of foreign countries such as U.K., U.S.A., I present the Chinese deflation combining with Chinese own present situation. This paper composes three chapters. The first chapter is the general deception of deflation, which analyses the deflation of definition, causes and harnesses. In particular, to the definition of deflation, I give my own opinion on the base of some opinions of other scholars. The second chapter analyses the past deflation of America, Japan, England and France, which have been presented through the western economic thought on Fisher, krugmun etc. The third chapter discusses Chinese deflation problem, which includes the main characteristics, causes of it, and how to resolve it.