The Influence Of Local Fiscal Expenditure On Residents'Consumption In China

In recent years, our country economy has been rapidly developed. However, the residents'consumption, as one of the economic development drivers, keep a lower developing speed compare to the growth of other development drivers, and severely restrain the sustained growth of the economy in our country, the proportion of consumption in the whole GDP keep at a lower level compare to many other developed countries. Meanwhile, the Chinese government in the early years has focus attention on the residents' consumption in China and treat this as an critical driver of economic growth, and set the growth of residents' consumption as an important goal when the government making long-term fiscal policy. Therefore, it's obviously to notice the importance of residents' consumption as a critical driver of the economic development of our country. The government fiscal expenditure policy as a crucial factor of many other influential factors on residents'consumption has significant effects, but in so far the impacts on residents' consumption is not quantitatively clear under the current specific national circumstances. Thus, this article, on the government fiscal expenditure basis, to explore on what kind of effects to the residents' consumption.Firstly, this article reviews and analyzes the discussion of the problem and the relevant conclusions from various domestic and foreign scholars, many of domestic and foreign scholars believe that fiscal expenditure has significant improvement on the growth of residents' consumption, the "squeeze into" effect; However there are many scholars believe that fiscal spending will reduce the residents'consumption, with a "squeeze out "effect, meanwhile a large number of scholars believe that when the fiscal expenditure classifying into different categories in different basis, has different effects on the residents' consumption, cannot simply classified as improvement or recession. On the basis of former study, this article discusses the developing trend of fiscal expenditure and residents' consumption of our country in recent years, compare and analyze the interrelationship between fiscal expenditure and residents'consumption for each particular region of China. The comparison results represent the steady growth of fiscal expenditure and residents'consumption at the same time, but the growth rate of residents' consumption is significantly slower than the fiscal expenditure, and the rate of residents' consumption to national GDP is reducing in recent years, seriously restrain the development of our country's economy.At the end part of this article, the writer collect the relevant data of fiscal expenditure and residents'consumption of various provinces from government published statistics, then analyze the impacts of fiscal expenditure on residents' consumption by building with fixed effect of variable coefficient panel data model and also examine certain conclusion from former study. When building the variable coefficient panel data model, using relevant data of fiscal expenditure and residents'consumption of each particular province and classifying fiscal expenditure to different categories, therefore the analysis results of panel data model represent the impacts of particular category of fiscal expenditure of each province on residents' consumption of respectively province. When the fiscal expenditure category classifying basis changed, the impacts on residents' consumption of each province changed also, and recommend to each province based on results of the analysis.