The Research Of Crowding-out Effect Of China’s Export On Domestic Consumption Demand

Currently China is in the status of high export and low consumption--low per capita income and large income gap,the domestic consumption demand is insufficient.Compared with the developed countries and developing countries,China’s consumption rate is low.Export scale is expanding,export products are mainly primary products and manufactured products.This essay explores whether large-scale export is the main reason for low growth rate of domestic consumption demand.The increase in exports will have a positive income effect and a negative price effect on domestic consumption demand.If the negative price effect is larger than the positive income effect,the export will crowd out domestic consumption demand.The paper studied exports’ crowding-outeffectof various industries separately on domestic consumption demand.The study found that these four industries---the food,beverage and tobacco industry,pharmaceutical and medical equipment industry,automotive,motorcycle and spare parts industry,cultural,sporting goods and equipment industry---have a significant crowding-out effect.The crowding-out effect rate is-7.2%,-9.5%,-6.7% and-5.4% respectively.In another word,if the export volume of the four industries increase 1 million US dollars,the domestic consumption demand of the four industries will respectively decrease 7.2 million US dollars,9.5 million US dollars,6.7 million US dollars,5.4 US dollars.While the crowding-out effect on mineral products,building materials and chemical products industry and computer software and auxiliary equipment industry are not obvious.