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In “From overcoming defl ation to preventing infl ation,” Liu He explains how Asia’s fi nancial crisis decrease of the volume of China’s international trade and contributed to a decrease in prices of domestic agricultural products, triggering defl ation. Fiscal policies based on expansion reforms featuring restructuring enabled China to enter a new era of economic progress and develop an economy that was open to the rest of the world. China made remarkable economic achievements but then also faced a new challenge: the imbalance between internal and external macroeconomic conditions. China’s macroeconomic policy makers had to right the imbalance from top to bottom.