Abstract: Since 1988,chicken production in China had been increased for 3 successive years. However,the production has met a severely decline after the autumn of 1991. It is indicated that the main reason of the decline is that the unduly high profit of chicken production in recent years has stimulated an excessively fast growth of the chicken industry,and the increase of chicken number,total egg and meat output has exceeded the development of consumer's purchasing a-bility. Therefore,the decline is an inevitable outcome of market regulation. It is shown that the effects of the decline has more benefits than disadvantages.The fluctuated development in chicken industry could never be avoided. To minimize the resulting losses, following strategies are suggested: 1) Control the number of layers and improve laying performance; 2) Reduce production costs;3)Improve production management and extend science and technologies;4)Terminate various preferential policies and subsidy so that all farms could compete in a fair circumstance; 5)Put emphasis on improving large scale breeder farms to guarantee chick quality; 6)Government should macro-regulate prices of raw feeds(mainly corn and soya) and control the exporting amount.