Analysis Of Income Distribution And Its Influence On Consumption In China

Since the reform and open-up policy has been taken in China, national economy keeps rapid growth with constant increase in household income and consumption. On entering 90s of 20th century, as the deep contradictions of economy system still remain unsolved and much deeper of the economic structure reforming, the increasing speed of household income and consumption draws low. So the unreasonable income distribution and the insufficient needs of our society are turning into two major difficult problems which restrict the development of our macro-economy and also hot spots researched by many economists.There is a typical dualistic economy system in China, so we take much attention to basic investment and export, depending on which, Chinese economy maintains rapid growth. However, the economy growth can not rely on investment and export in the long run. Consumption can not be ignored but very important in the "three carriage" which promote the economy growth. The key of economy growth is the coordinated growth of income and consumption, especially make consumption the main economy growth point, which based on the reasonable income distribution. However, the main problem of our economy and society is the fractured situation which exists in the income difference and the structure of product and service demand. So the unreasonable current income distribution condition and incompetent consumption capability become the main factors to restrict the economy growth.Therefore, this thesis researches on the relationship between income distribution and consumption since the reform and open-up.It tries to begin with the current situation of them. The main purpose is to find the reasons of insufficient consumption from income distribution aspect and find effective means to adjust the policy of income distribution and lessen the gap of income distribution, thus can stimulate the consumption, expand the inner demand and promote the stable and coordinated growth of national economy.This thesis includes four chapters. At first, it summarizes and evaluates the foreign and domestic theories and researches on income distribution. Next, the thesis summarizes the Chinese income distribution condition, including the policy, principle, gradual progress and characteristics. As the continual increase of income, the difference of urban and rural, diverse industries and ownership are expanding constantly. There're lots of reasons for the difference of income expansion, the thesis mainly analyses the system, distribution way, government conduct and institution factor etc..The third chapter is the core and focal point, in which the thesis makes regression analysis on income and consumption with evidential method. Combining consumption function theories and choosing a lot of data, this chapter separately analyses urban and rural income and consumption, urban and rural income and consumption structure, the difference of urban and rural income and propensity to consumption, the difference of income distnbution and the difference of consumption structure. Finally results the relationship between income distribution and consumption. The unreasonable income distribution will restrict the increase of consumption, namely negative interrelated relationship.Based on the former summarizes and analysis, it comes to a conclusion. In order to solve the insufficient consumption demand, we should start with adjustment of income distribution, which is an overall and systematic work and involves various aspects. The government should give full scope to strengthen the secondary income group, improve and perfect social guarantee system, adjust economy structure, apply coordinated growth policy and promote labor quality etc..