Analysis Of China’s Consumer Questions In The Context Of Expanding Domestic Demand

The household consumption is an important component of themacro-economy. Household consumption with government consumption,investment and net exports constitute the entire national economy. Theimproving of household consumption and the coordination of consumptionstructure is the ultimate goal of production, and it helps to improve people’sliving standards and quality as well, so it supports national economicdevelopment. In context of global financial crisis, China’s export growth ratecomes down significantly; so expanding domestic demand (includingconsumption and investment) is very important and meaningful. Activelyexpand domestic demand; especially enhance household consumption tostimulate effect on economic growth. This plays an important role in ourcountry’s economic stability.Based on previous studies, the paper constructs a set of multi-levelresearch framework, including household consumption status, consumptionstructure, and consumption function and consumption policy. The paper tries toexplore and analyze China’s consumer related issues in the context ofexpanding domestic demand.First, analyze the status of household consumption in our country. Thenuse cluster analysis to divide the stage of China’s consumption structure, anduse the extended linear expenditure model (ELES model) to analyze the staticconsumption structure and dynamic comparative consumption structure. Thenresearch the factors which affect our consumption from macro-micro andmicro-economic perspective, use cointegration theory and error correctionmodel (ECM) to fit the consumption function of consumer level, disposableincome, uncertainty, liquidity constraints and the income gap to measure thequantitative relationship between the consumer and them. Finally, on base ofconsumer policy tools, review our consumption policies and the effects overthe years, and evaluate the effects of current consumption policy. Through theoretical and empirical analysis, this paper gets the followingresults. Overall, the low growth of household consumption is China’s directcause of the low growth of consumption, and it is also the reason of the rate offinal consumption declining since21st century; Urban and rural householdconsumption showed a stage of evolution; Income is a major factor fordetermining consumption, uncertainty increasing and liquidity constraintsincreasing and gap between the rich and the poor widening will not beconducive to the expansion of household consumption; The expansionconsumer policy play a certain role in household consumption, but its effectwas significantly lower than the effect of expanding investment policy. Thecurrent macroeconomic policy should be mixed and be established for aneffective force to the expansion of household consumption, thus it can brings abetter effect.