Chinese Money Supply Fluctuations

Money supply fluctuation gives jolt and causes harm to a developing national economy, which is increasingly recognized. Therefore, money supply's stability and its control has become an important question for study in theory and practice, which is expected to solve as soon as possible.This article is focused on the endogenous and exogenous factors influencing the money system expounds the basic concept and measures to control and smooth the money supply fluctuation of our country on the pattern of the fluctuation against the background of 50-odd years old economy since the foundation of new China. During the period both planning and market mixed economic system has evolved in China. The article is divided into four chapters.The first chapter gives a profound analysis of the overall formation and main characteristics of money supply fluctuation and points out that the real formation and main characteristics of money supply fluctuation is scientifically defined, the guidelines for analysis of money supply cyclical fluctuation are scientifically determined, the first-hand date of the essential guidelines are scientifically processed.The second chapter starts with the analysis of the repetition of the historical phenomenon of money supply fluctuation since the foundation of new China, than discusses the nature and stratums of the money supply fluctuation in our country, as well as the fluctuation period, amplitude, frequency and component stages on each stratum. It shows that only by getting command of the regularity and features of the money supply fluctuation can one either stands up to the fall of money supply growth after its rise or remains calm when money supply growth rises greatly for years running after its fall. The one who is frightened out of his wits may make an ill-advised move. In comprehension of the nature of money supply growth fluctuation may lead to faulty and changeful money policies. In the result, the sufferings because of the money supply growth fluctuation are not alleviated but aggravated artificially.The third chapter makes a study of reasonable range of money supply fluctuation. It advances the theory as follows: suppose that it is random factors not system factors that bring about money supply fluctuation, than the appropriate range of moneysupply and the warning limit of fluctuation can be determined with statistical methods; if the fluctuation approaches or goes beyond the limited, which shows system factors take place or natural calamity occurs of faulty policy has come out, regulation measurers must be taken immediately.Chapter 4 states that in order to prevent the severe fluctuation of money supply we must apply the following policies: (l)Stress on the innovations of the control system of money supply; (2)Create new financial marker participants; (3)Improve the financial market system; (4)Renew the monetary policy mechanism; (S)Construct the market interest system.The main findings are as follow:Compared with other countries of the world the growth rate of the Chinese economy over the period 1952-2001 has been, on average, quite high. However, China's economic growth has been unstable, with sudden ups and downs and major fluctuation in direction. Severe fluctuations in China's money supply are of primary importance as economics, social and political factors. They affect not only the economy and the society at large but also the living standards and Chinese people.