The Influence Of Chinese Urban Residents’ Income Structure Changing On Household Consumption

Many changes have taken place in Chinese economic system since the reform and opening up, and the economy grows rapidly during the21st century. The living condition of residents in our country, especially the urban residents, is much better now, and urban residents’ per capita income level and different types of income are improving, so is per capita consumption and the consumption structure. However, the rate of Chinese citizen consumption, that is the proportion of total consumption in gross domestic product (GDP) has been declining significantly, which leads to the low ratio of consumption in quite a long-term in China. It’s much more serious for Chinese urban residents. The government has taken a variety of measures to expand domestic demand so as to stimulate consumption, but the effect is not obvious. The ratio of consumption remains downward.Low consumption rate results in relatively insufficient domestic demand. For economic growth cannot only depend on investment and export, consumption is very important. The key of consumption growth is steady improvement of residents’ income, including stability of the income increase and rationalization of the income structure. Urban residents is the main force of Chinese consumption, and the ascension of urban residents’ consumption rate is significant to the increase of the whole residents’ consumption level, so the subject on the influence of the urban residents’ income structure changing on household consumption has important theoretical and realistic significance.This paper divides the income and consumption according to the statistical standards, beginning from theoretical reasons of that subject, summarizes time series of the income structure and consumption structure of urban residents in China since2000, and tests it by econometrical analysis. The paper also verifies the stable relationship between consumption and income of urban residents, and the elasticity coefficient of consumption to income structure shows the following characteristic, namely salary income> transfer income> property income> operating income. As for the consumption structure, wage income affects food, clothing, home appliances, transportation and communication, education and cultural entertainment, and miscellaneous spending significantly. Operating income affects food, and housing significantly. Transfer income affects food, clothing, home appliances, health care, housing, and miscellaneous spending significantly. Operating income and property income has negative effects on home appliances, health care, education and cultural entertainment.Finally, given full consideration to the income and consumption structure, the paper suggests the methods of increasing different income, strengthening labor skills, improving the quality of labor, refining the corresponding social security system, stabling residents expect, improving consumer market, and innovating consumption so as to expand the urban residents consumption.