The Impact of Inflation on China's Economy and Countermeasures

Judging from the economic trends since 2008, we can know that China’s economic development and monetary policy are closely related. In the past decade, the central bank has formulated an efficient monetary policy, and used lower interest rates in monetary policy to alleviate the impact of the international financial crisis on China’s economic development. But from another perspective, the large amount of currency circulation has also led to the emergence of excess currency liquidity. This situation where prices continue to rise over a period of time will lead to inflation. This requires a series of measures to curb the continued development of inflation, such as raising interest rates. These methods can effectively control inflation. It can be seen from this that the effective implementation of monetary policy can reduce various risks caused by inflation, and it can also be seen that inflation has a huge impact on China's monetary policy. Through analyzing the basic knowledge of inflation and the impact of inflation on our country's economy, some countermeasures against inflation are proposed.