China's Deflation Problem Of Endogeneity

Deflation has become more and more serious in economic field all over the world form 1997. So has in our country. The topic is so fascinating and challenging that scholars hold a heated discussion on it. Not because we have to find solution to overcome it urgently, but because it will give existingmonetary policy a new challenge--that is, whether currency supply isdetermined by administer or not; whether monetary policy is useful in solving deflation problem just as it's useful in inflation period.Unlike that in west countries, there has a interesting paradox in our country: deflation in our country emerges under positive monetary policy while in west it emerges under tighten monetary policy; Besides, we keep a rapid economic growth speed in deflation period. Those illustrate that analysis and solve our economic problem must base on real condition and combining west's theory and experience.We think that all phenomenons and the corresponding policy should be considered according to our economic reality, which is phenomenon's background and policy operating platform. Obviously, our country's economic problem influenced by multi-factors. So we must analysis it in historic and objective eye. Avoiding misunderstanding and blindness.This essay tries to find reasons of deflation though theorical and practical analysis, then draw a conclusion that our currency supply has strong inside born nature. Consequently the author gives new idea on solving deflation problem. Which need deepen economic reform and use multi macro economic policy scientific .at last, the author emphasized that the impact of deflation should be dealed with objectively in reform transferring period.