Consumption Level And Consumption Structure Of The China’s Middle-income Earners

China’s economy was facing the problem of how to re-start domestic demand topromote economic development. In the end of2011, it was the first time for the CentralEconomic Work Conference to propose increasing the proportion of middle-incomeearners, also to link "increasing the proportion of middle-income earners" and "expandingdomestic demand for the first time.When the domestic economy is facing insufficientdomestic demand, the expansion to the number of this group will be the release of thepurchasing power, not only to form a new momentum of domestic demand, but also toadjust the consumption structure of China’s middle-income class in order to promote theupgrading of consumption.The paper studied the mainstream theoretical models of consumption structure. Andthen the ELES structural model of consumer demand model, was used to estimate thesituation of the middle-income groups of the consumption structure between2003and2010. As more, parameters from the model was used to elastic analysis to explore theconsumption characteristics of the groups change in status.We concluded that:First, in total consumer demand, the basic needs of China’smiddle-income groups still had the potential to create domestic demand. Althoughincreased with increasing disposable income, but the increase of the basic needs was onlythe former’s a half.Second, the total marginal propensity to consume was in a steadydecline. The basic needs of all kinds of consumer goods and the propensity to consumeonly had little change.China’s middle-income groups of the consumption structure, had afundamental characteristic of the survival in general, and both enjoy the type of instabilityand the developmental.Third, the elastic analysis results show that the small elasticity ofconsumption of food and other necessities, the large change in education, while the othermanifested modulus of elasticity in the increase or decrease, without much substantivechanges.Finally,we can judgment that, the consumption structure of China’smiddle-income groups, in general, had a fundamental characteristic of the survival, bothan unstable consumption structure type of enjoying and developing.When domestic demand becomes dominant in China, to expand the proportion of middle-income earners and then optimize and improve the structure of their consumptionwill bring a new impetus to the slow economic development in the transitionperiod.According to the main conclusion of above empirical analysis, to expand theproportion of China’s middle-income earners as well as prompt the consumption structureescalating, this article presents corresponding policy recommendations from several partsas below:income distribution reform and improve the income, domestic employmentpromoting,the large proportion of investment in education, our residents ’social securitysystem improving and the urbanization of rural residents’ accelerating.