Since the 90 s, China's economic growth volatility and price levels are very similar between common trends. Based on phillips curve and okun's law theory basis, the area has the transfer of state space model of the relationship between the economic growth rate and inflation rate has carried on the empirical analysis. We first estimate the expected rate of inflation and the potential economic growth rate, and then according to the error of inflation expectations and the relationship between the output gap to describe China's dynamic characteristics of the phillips curve. This paper found that China's "output a price" relationship with the nature of the long-term phillips curve, growth reflects the high volatility and low volatility area system, inflation expectations also showed two different forms of adaptive expectations.

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