Beijing Municipal Government Spending On Household Consumption

China's economy has completed the transition to a socialist market economy. But there still a certain gap between government function and the market economy requirements. The Government is still playing a vital role in the market and having a great influent toward the economy system. The global economic crisis started from the U.S. "subprime" crisis had a greater impact on China's economy. So the state has adopted a strong stimulus of domestic demand, in which to stimulate consumer consumption is an important part. From a practical point of view, the Government can play a leading role in direct government investment, such as public works, however, it is difficult to lead consumption, especially consumer consumption. What kind of impact can be made by Government Expenditure on consumer consumption and how much the impact will be is important issues. Most studies abroad (particularly studies on the U.S., Japan and other developed countries and regions) conclude that government spending crowd out the household consumption, but our scholars'studies show that government spending has crowded in household consumption in China.On this paper, I choose Beijing which has a typical characteristic as the research object to study from the theoretical and empirical point of view, to confirm each other and complement each other. Theoretical analysis explored that the different components of government spending may have an impact on consumer consumption, and as a theoretical basis to explore the relationship between the two; Quantitative analysis selected 1985--2009 years of Beijing government expenditure data. Paper study the relationship between household consumption, the resident disposable income and total government expenditure by bivariate regression, and the relationship between household consumption, disposable income and government expenditure components by empirical regression. We can conclude that:the disposable income of residents is a key factor to the consumer consumption, and the Beijing general government expenditure had a weak crowding-out effect on private consumption. Stmctural analysis of government expenditure which selected agricultural expenditure, Culture Science and Health Care Expenses, administrative costs and social security expenditures at the same time through stepwise regression show that only Culture Science and Health Care Expenses enter the regression model, and have a weak crowding-out effect. In selected time interval, our market economy and government functions were experiencing a severe change. In particular, the distribution channel of government financial resources and the function mode are experiencing different stages of change, showing un-stability and uncertainty, so as to show an unstable effect on consumption. Thus some variables cannot be reflected in the regression model.On how to optimize the government expenditure to promote household consumption proposed in this paper:the most important measure is to increase the disposable income though improving income distribution in the proportion of the initial implementation and improving the level of social equity tax policy. For the problems of Beijing Government Expenditure, the government can take the following measures:such as adjusting and optimizing the financial expenditure, increasing people's livelihood expenses; sound fiscal transfer payment system in Beijing, improving fund use efficiency. Finally, Beijing should strengthen regional cooperation to ease Beijing's population and environmental pressures.