Studies Of Final Consumption Expenditure Influencing The Sevice Industry

Given the current expansion of domestic demand and to develop services policy background, the paper indicates China's current reality that consumption rate and share of service are low.Next is review of domestic and international literature researching on impact of consumption on the service.It analyzes the mechanism that consumption, government consumption affect services development and upgrading of the structure, and uses relevant statistical data and the analysis of input-output table for its empirical test to observe the impact of consumption on the size of the service industry, but also compares with foreign empirical data in some countries and their test results. The results shows that development of service industry is influenced greatly by its own past and the final consumption has greater impact than that of investment and net exports.Government spending has greater influence on services output than consumer spending.There are similarities and differences with the case of the United States and India.Structure of final consumption affects both the service industry output and structure.Consumer demand of the service sector as intermediate demand is greater than that of governmet consumption.And that of urban residents is greater than rural residents.Total consumption of urban residents and the growth rate of service demand are greater than rural residents. Granger causality test shows that the development of urbanization and the rise in the proportion of urban residents consumption are the reasons for development of service industry. Government consumption in the social culture and education promots consumption,while defense spending and administrative expenses crowd out consumption.Strctural analysis shows that the increase of government consumption share in final consumption and urban residents consumption share in household consumption causes service restructuring.Upgrading of consumption structure of urban and rural residents leads service restructuring.Irrational change in government consumption structure that the proportion of administrative expenses increases may hinder service restructuring. Finally, this paper puts forward some policy recommendations as a reference.