[Abstract] China's recent social and economic life, whether it is commodity prices or stock prices or market prices are not to be optimistic about the changes occurred. In this one, there are many factors at work. Based on the current China-depth analysis of the economic situation, its main analysis of the impact of factors one by one, trying to start some of the reasons for China's economic development in today's useful suggestions.

[Key words] inflation; stock; prices; the consumer price index

First, China's current economic development

China's economy has developed rapidly and steadily, in 2006 and 2007, as always, still maintained a relatively rapid and steady pace of development, macroeconomic development in good condition, in addition to the stock market and real estate in recent years the development of the market in good shape, people's investment growing enthusiasm, or increase in stock prices and house prices. At the same time, the prices of other commodities also increased, especially since the second half of 2007, food prices are soaring, pressure to increase the survival of people, many people comment on the author of China's \phenomenon, which is the Government, all levels of academic and social economy of common interest and concern. In response to these prices the stock and property markets, as well as issues such as inflation, we will analyze one by one.

Second, China's current economic development of the analysis of the main problems and their causes

(A) the development and changes in the stock market and the reasons

In 2005 from the split share structure reform, China's stock market situation gradually improves, the above index cards as an example, in 2005 at about 1100, and

2007, the highest reached 6100 points, just two years, an increase of 5000 point. However, from the beginning of November 2007, the stock market began to fall to September 2008 has dropped to around 2000. It is also from the 2007 stock market in droves, trying to present how to extricate yourself from the stock market.

The current round of stock market against the backdrop of rising share reform and the appreciation of the renminbi. Share reform to achieve the full circulation of the shares of the entire Chinese economy, this reform is a milestone in moving towards market-oriented, July 21, 2005, 2 percent revaluation of the RMB, 1 U.S. dollar from the original 8. 27 yuan to adjust to 1 U.S. dollar 8.11 yuan. The appropriate timing of the appreciation of the renminbi, not only changed the market expectations at the time, but also with the change and the promotion of the shares, which together with China to promote the process of the stock market. However the short term, when more and more capital into the local stock market, and the value of the stock itself has not been a substantial increase, it will have a stock market bubble, while the bubble is bound to be broken. In addition, the country's tightening of the important factors. From March 2007 to August, the central bank to raise interest rates four times, making one-year deposit-taking financial institutions to benchmark lending rate by 2.52%, 6.12% to 3.60%, 7.02%. With the past \more up\the impact of changes in direction. Referred to as the stock market fell more than the internal. In addition, changes in the international environment has also resulted in China's stock market can not be ignored the influence of the United States at the end of 2007 credit crisis, but also affect the transmission mechanism through a series of China's stock market, which can be seen as a stock market decline in China's external reasons.

(B) the development and changes in the real estate market and the reasons

As the real estate industry and the livelihood of the people closely related to an

industry, housing prices rose more than just an economic phenomenon. Measure of housing prices in many of the indicators, GDP growth as a factor in the survival of the burden from the people's point of view. We can only income from the target price to start, in 2003, the house price growth has accelerated, prices showed an upward trend in income, especially soaring housing prices in some big cities.

Some scholars through the study found that different income groups in China income gap between the great prices. In 2005, for example, China's lowest-income households in housing revenue is 22.69, the same group of the international average of 236%; middle-income housing income households is 7.75, the same group of the international average of 86% ; the highest income households in housing-income ratio is 2.45, only with the group of the international average of 44%. In 2005, China's highest and lowest income households earned less than the gap between house prices is 20.24, while the gap between the highest and lowest international is 7.8, only 39 percent of China. Although it seems the average income of China's housing prices is not too high, but by the price gap between income of the residents showed a big income gap has been exposed, low-income families in the protection of the basic right of residence has become a problem, and under market economy conditions, in low-income families by raising the income is not likely to significantly improve housing affordability, which requires the Government to play a role in housing policy.

(C) the situation and the reasons for price increases

China's consumer price level rose, in particular food, it is a whopping 17.6 percent increase. According to China's National Bureau of Statistics revealed that in 2007 year-on-year increase in CPI by the end of 2006 of 1.5% rising to 4.8 percent, a record since 1996, CPI rose 8.3% the highest level since. It also broke China's CPI over the years has remained at less than 3 percent of the situation, it seems to some extent, this increase with China compared to GDP growth rate is not consistent. Therefore, many people think that China's \