Study On Currency Excess Liquidity Problem Of China From Consumption Demand Aspect

In recent years,"Excess Liquidity"has become the most frequent one of the key words in the Chinese economy discussion, the problem of excess liquidity had aroused wide attention and research. The central bank also used up-regulating statutory deposit reserve ratio, raising interest rate, open market operation and other multiple methods to recover liquidity, in order to governance the problem of excess liquidity in China. However, as of today, the issue is still outstanding, and has produced a series of negative effects to the economy and domestic living, solve the problem of excess liquidity has become an urgent task. Only solve the excess liquidity from fundamental, we can eliminate the risk of macroeconomic overheating, so as to ensure the rapid and healthy development of nation economy.In this paper, firstly introduced currency liquidity surplus overview in China, through described its current situation and negative effect to economy, outstand the necessity and urgency of solving the problem of excess liquidity. Then analyzed China's high saving rate, which result in the consumption demand insufficient, how to impact the problem of excess liquidity in China using theoretical and empirical analysis method.In the empirical analysis process, using the ratio of generalized monetary supply quantity to Gross Domestic Product to measure the"excess liquidity", using household saving rate to measure the consumption demand of our country. Through co-integration test, got the conclusion that there had a positive long-term equilibrium relationship between the excess liquidity and urban resident saving rate. Further established an Error Correction Model, found that rural resident saving rate and the growth rate of foreign exchange reserve affect its short-term dynamic adjustment process to varying degrees, and because system transitionary, it reflected different degrees of impact on relationship in different historical periods.Finally, according to how to enlarge consumption and decrease saving rate to address the problem of excess liquidity in our country, proposed to raise resident income, improve the social guarantee system, activate rural consumption market, and develop consumption credit etc policy suggestions.