Based on the recent policies of the People ' s Bank and the realistic significance of inflation, this paper reviews the reasons explained by the professionals in the theoretical circle, indicating that China' s scholars generally believe that the main reasons for current inflation pressure include imported inflation, demand- pull inflation and cost-push inflation. With classical theoretical analysis, this paper points out that the pressure of the current inflation is a result of following two factors: the passive issuance of base money caused by the exchange rate system of RMB and the excess liquidity resulted from over-issuance of currency following the expansionary monetary policy. Finally, the paper provides some corresponding policy recommendations in its concluding remarks.