Despite the fact that China is still a developing country with low per-capita income, it is on the verge of becoming a “middle-income” society, increasingly showing signs of a mature economy.

In 2008, in.ation has once again become a prominent headline in China's macro-economy, but this time it is in a different context. The inflation that occurred during 1980s and 1990s was related to the transformation of the price regime, when the country evolved from a planned to a market economy . The in.ation we are facing now, however, is a transitional economic phenomenon caused by primary resource and labor cost changes as income levels climb and the nation integrates into the world economic system.