Research On Consumption And Economic Growth In Rural Areas

In consumption, investment and export the three elements of economic growth, China’seconomic growth is largely depend on the labor-intensive export growth and investment.Leading to income growth in China can not keep up with economic growth. Since the30yearsof reform and opening up, China’s average annual economic growth of9.9%, corresponding tothe real incomes growth of about7%, which essentially restricts the expansion of consumerdemand.2013, although the external market environment is a positive trend, it is expected thatChina’s exports will continue to maintain a slight increase of about7%, but the main engine ofexternal demand for China’s economic growth is losing. The central work conference pointedout that changes in the external environment is Forced China to expand domestic demand,improve the ability to innovate, promote the transformation of economic development mode.From per capita angle perspective Shanxi Economic farmers are of the "shortcomings" inthe economic development of Shanxi Province, the gap between urban and rural income levels.In recent years, the impact of the international financial crisis and the debt crisis in Europe,Shanxi Province, the decline in exports, export-oriented economic growth model is severelyinhibited the development of the province’s domestic demand.1990, the province’s urban andrural residents per capita living consumption expenditure accounted for this proportion2.1:1,2011expanded to2.5:1. In comparison, the rural population, a wide range, the province’srural population accounts for2/3of the total resident population in2011. To achieve thetransition to an open economy based on domestic demand, efforts must be made to increase theincome of rural residents, expanding consumer demand, especially consumer demand in ruralareas, to stimulate the rural market has a huge consumption potential is particularly importantfor maintaining sustainable economic development in Shanxi.In recent years, however, affected by the international financial crisis and European debt crisis,exports of Shanxi Province, export-led growth model which hold back the expansion ofdomestic demand in the province. The province in1990the proportion of urban and ruralresidents per capita consumption expenditure of2.1:1,2011years this proportion of the expanding to2.5:1. In comparison, the rural population is much, range, in2011the province’srural population accounts for two-thirds of the total permanent population. This situation,increasing the income of rural residents, promote consumption, stimulate has huge consumptionpotential of rural market is particularly important to maintain the sustainable development ofeconomy in Shanxi Province.Using economic data of Shanxi Province from1990to2011,introduced the cointegrationtheory for long-run equilibrium relationship between rural residents’ consumption and economicgrowth relationship, the Granger causality seeking a causal relationship between the two, vectorauto regression (VAR) model to investigate the changes in the relationship between theshort-term, the impulse response function and variance decomposition method to analyze theinteraction strength between them.Finally this paper’s main conclusions and policyrecommendations.The results show that the rural residents’ consumption and economic growth in ShanxiProvince have long-term stable cointegration relationship; GDP is the granger reason of therural residents’ consumption, but is not the granger reason of GDP, rural resident’s consumptionhas a one-way causal relationship, causality that Shanxi rural consumer is not the reason toboost GDP growth, reflecting the recent years, the Rural consumer does not stimulate economicgrowth in the region have a significant pull effect. In the long run, consumption and economicgrowth of the rural residents in Shanxi Province has not yet formed a coordinated developmentof positive interaction between basically showing a long-term negative impact on consumptionexpenditure of rural residents in the region’s economic growth. Shanxi Province, the overalleconomic growth than investment-driven, resource-intensive and export-led, all aspects of thelocal economy, policy, rural consumption growth can not keep up with the region’s economicgrowth, resulting in the consumption of rural residents in Shanxi Province to some extent stillonly on economic growth in the region’s response to consumer demand on a passiverelationship.