In the four decades since the beginning of China’s reform and opening-up，price increases have been more common than price declines. This trend has led the academic community to focus largely on understanding the origins，mechanics，impacts and solutions for inflation. Conversely，the study of price declines has received less attention. Through an empirical assessment of the growth rates of both the Consumer Price Index (CPI) and the Producer Price Index (PPI)，it can be seen that there were two notable price declines in China in 1998-2003 and 2012-2017.

When investigating the main causes and mechanics of these declines，a clear pattern emerges. While prices are significantly influenced by monetary factors such as 1monetary policy，this is the underlying logic that has led some scholars to attribute price changes to the effects of monetary policy. However，it is apparent that a variety of other factors can also influence price fluctuations. To effectively mitigate the effects of price fluctuations that are not caused by monetary policy changes，it is not solely dependent on monetary interventions. Studying the side effects and reactions to previous price recessions in China can enrich our understanding of price fluctuations.

Key Dynamics during the 1998-2003 Price Recession

Between 1998 and 2003，there was a decline in China’s CPI and PPI growth rates，with several years even recording negative growth.