China's Consumer Demand, Lack Of Institutional Causes And Countermeasures

Since the middle of 1990s, deficiency of consumption demand has emerged in the macroeconomic operation, and the main problem to it is that household consumption is rather low. There are various views to explain the problem in the recent articles, however, I think most of them are focused on the superficial factors or direct reasons, while few scholars from the economy system to do research, which, I think, is very important to help us find the main problem that restricts the growth of consumption, to take effective measures or make connective policies to solve the deficiency of consumption. So, this paper will analyze why the consumption go into a decline in the institutional perspective, and try to give some advice to that.First, different system arrangements between the urban and the rural strengthen the dual economic structure, which cause the big gap between citizens' income and peasants' income. And the low income, peasants have no enough money to consume. Second, under the double-track system, market allocation and government allocation are all in existence, which lead the grey income to grow quickly, which also cause the income gap between urban and rural, different regional income disparity. All that restraint the consumption grows. Third, just as the double-track system, the government interfere in market allocation, and government function is dislocated. So, the macro-investment structure and macro-consumption structure are out of balance. Forth, Because of the progressive reform, the expectation is uncertainty, which cause consumer prudently to consume and lower the marginal consumption tendency.According to the above reasons, this paper is trying to point out that increasing domestic demand depends on the system reform. Abolish urban biased policies; weaken the dual economic structure, definition the government functions correctly, enhancing the market function in the allocation, changing government responsibility to the public services.This paper contains three parts, which is preface, text, and conclusion. In the first part the paper is try to introduce the background of the paper. In the second part, this paper empirically analyze the consumption demand, and get the reason of the deficiency of consumption demand, and it produces negative influence to our country's economy and the social development. Then drawing lessons from Mark's economics, western economics, and domestic relevant theories, this paper analyze the reasons that restrict the consumption with substantial evidence analysis method, contrast research method, logic to reason logically a method...etc, and the paper also give some suggestions. Last is the summary.