A Research Of The Reasons For The Low Inhabitant Consumption Rate Of China

At the situation of the global financial crisis, the economic growth of China has entered a period of slow development. Continuing to depend on investment and export-led economic growth in China has appeared to be inadequate. At the present and the future for a long period of time, expanding domestic demand and enhancing the effect of consumer demand in promoting economic growth of China, will have a decisive role of China's economic recovery. Consumer demand is the eventually power of driving economic growth, discussing the issue of China's consumption has a great significance in the current situation.Firstly, the paper analyzes the final consumption rate and the inhabitant consumption rate of China. By horizontally contrasting with the world average and the "standard structure" of Chenery, found that the final consumption rate and the inhabitant consumption rate of China are grossly low, which is very detrimental to the healthy development of China's economy. By longitudinally contrasting with the historical data of China over the years since China's reform and opening, found that the final consumption rate and the inhabitant consumption rate of China remained goes down, and changes in the rate of final consumption mainly caused by the changes of the rate of inhabitant consumption.Secondly, theoretically analysing the reasons for the low inhabitant consumption rate of China and its mechanism of action, found that the low inhabitant consumption rate of China is mainly due to the low residential average propensity to consume of China. Then further study the reasons for the low residential average propensity to consume of China, found the main reasons are as follow: the impact of cultural tradition of China, the strengthening uncertainty of people's income and expenditure anticipation which caused by the economic system reform and the inadequate social security system of China, the widening income distribution gap, the slow process of urbanization, the imperfect consumption environment and the characteristics of the population structure of China, and so on.At the basis of theoretical analysis, this paper makes use of cointegration analysis and Granger causality test based on relevant statistical data which thirty years since the reform and opening up of China to verify the relationship between the residential average propensity to consume of China and two quantifiable factors: the gap between income distribution, the urbanization level. The results of test confirm the theory analysis in the previous text.Finally, on the basis of the study in former text, a several policy-related suggestions are put forward to raise the residential average propensity to consume and the inhabitant consumption rate of China, with the hope that these suggestions might be helpful to improve the situation that the inhabitant consumption rate of China is grossly low, and enhance the effect of consumer demand in promoting economic growth of China.