【摘要】In the transition of Chinese economy to marketing economy, the dramatic monetary expansion since 1978 is a prominent feature of the Chinese economy. Despite repeated attempts, researches on M0 are few. This article gives the ECM on M0 and tests both hypothesis about the M0 expansion: Repressed inflation and Monetization. In the last, it analyzes the factors which affects the demand for M0 and offers some policy advice.