On China's Deflation Issues under the New Normal

With such weak price indexes as CPI,PPI,etc. under China's macro-economic downturn,the call for the deflation home and abroad has never ceased and caused a plenty of disputes,which lie in the different understandings of the deflation concept. As for whether the deflation must be associated with the economic recession,there exists no one-to-one correspondence between them two from the perspective of world economic history. The main causes that China's commodity prices currently fall lie in the reduced investment demand and the excessive supply of production capacity,which result from the joint function of periodic and trend factors. From the time perspective,China's current deflation takes place under the background of the great benign changes of the economic and social development structure,and is at most mild in terms of its degree as well as has the certain degree of correction in terms of its quality,which is totally under the scope of controllability from the possibility of control. Hence the policy measures of macro-control are supposed to taken under the unified framework of general supply and demand,and resolve China's current major economic contradictions by improving the general supply and expanding the general demand.