Improve Rural Residents' Consumption Ability

Increasing farmers'consumption levels and opening up rural markets are important ways to increase inner consumption and to improve fanners'living standards. Currently, there are many government policies to expand consumption market in rural areas. For example, lessen farmers'economic burdens; build a better welfare system; increase investment in infrastructure construction, subsidized consumptions and etc. All these policies provide real benefits to farmers, but they are not permanent solutions. Macro-control will improve hard consumption power, but not the soft consumption power (income level). In that case, increasing investment in infrastructure construction will only lead to overcapacity and wastes of resources. In the same way, a welfare system will result in more government expenses and fewer hard-working residents.This study found out that the consumption level of Chinese farmers is greatly related to the growth rate of agriculture. This is because farmers'incomes are mainly from agriculture, and farmers tend to save their other supplementary incomes. Thus, their savings cannot be effectively utilized by rural economics. The outflow of savings results in slow economic growth rate of rural area. Therefore, agriculture industry is lagging behind to the second and third industry, and farmers'incomes and their consumption level do not increase for a long time. The author pointed out that, in order to increase famers'consumption level, we have to improve financial services to stimulate economic growth in rural areas. Financial institutions need to invest more in rural areas, and speed up the capital circulation, which will enhance the foundation of agriculture. We need to increase both the capital circulation and capital level in rural area. It will help improve farmers'current incomes and expectation for future income, and make their wish list become real action.