Abstract: The Mexican Hatwavelet is applied to analyzing the fluctuations of economic development in P. R. China since its foundation in 1949. The increasingrate ofGDP is analyzedwiththeMexicanHatwavelet at a range of time scales, and the causes of the fluctuations is discussed based on macroeconomic theory in view of government policies, investment and consumers’behaviors. China’s economy shows different cycles at different time scales, and it is affected by the government policies, important political events, investment and consumer’s behaviors.