(1) Inflation in China is caused by the overheated economy around the end of the 1980s. Since the Third Plenary Session of the 11th Central Committee of the CPC in 1978，China has carricd out the policy of reform and opening up to the outside world. As a result，China's economy developed rapidly and the people's living standard rose markedly.
(2) Also the national strength was enhanced. But in the process, excesses in the rate of economic development and the scale of capita] construction caused an imbalance between total demand and total supply. Inflation emerged. China has primarily tackled inflation with economic measures，including a tight monetary policy, raising interest rates and controlling loans.Besides，China has adopted some administrative measures such as cutting unnecessary economic construction projects.
[注]tho scale of capital construction 基本建设规模 a right monetary policy 银根紧缩政策
(3)The issue of the banner is of cardinal importance,as it represents our orientotion and image. Our declaration of unswervingly adhering to the line since the Third Plenary Session of the 11th Party Central Committee means unswervingly upholding the banner of Deng Xiaoping's theory on building socialism with Chinese characteristics. With Comrade Deng Xiaoping having passed away，the whole Party，particularly senior leading cadres，should attain a high level of consciousness and staunchness on this specific issue. We will never waver in the face of any difficulties and risks.