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An Analysis of Rural Household Consumption and Its Influencing Factors in China

Author: LiZhiZuo
Tutor: HuangXianFeng
School: Liaoning University
Course: History of Economic Thought
Keywords: Rural household consumption Consumption demand Influencing factors Rural household income
CLC: F224
Type: Master's thesis
Year: 2011
Downloads: 130
Quote: 0
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Abstract


Consumption, investment and export are the three carts which expand aggregate demand and then stimulate economic growth in a country .Since the reform and opening up, China’s economic grow rapidly with excessive investment growth and excessive dependence on foreign trade. GDP of 364.52 billion yuan in 1978 rose to 30.067 trillion yuan in 2008 with an increase of nearly 83 times. However, the level of domestic consumption did not increase, but declining. Resident final consumption rate decreased from 48.8% (1978) to 36.1% (2008).Lack of consumer demand has always been a major bottleneck which constrains China’s economic growth. In 2008 the global financial crisis spreading as dominoes to the real economy, China has to re-examine the importance and necessity of expanding domestic demand when the external demand reduced significantly. However, the ultimate goal of production is consumption; consumption is the only driving force of economic growth. Therefore, expanding domestic demand and improving the level of consumption would be the most fundamental and long-term approach to ensure the economic grow steady and rapidly.Consumer spending includes rural household consumption and urban resident consumption, since China is a large agricultural country with typical "dual economy" structure, and the rural population accounts for a large proportion of the total population. Therefore, the rural market has a huge consumption potential. In theory, the rural consumption should make greater contribution to the economic development and growth of GDP, So in the current situation , analyzing China’s rural household consumption problem has some practical significance .This papers is divided into five parts, the first part mainly describes the research background, significance, theoretical summary of consumption of rural residents. The second part shows that the consumption level and structure of Rural residents are significantly lower than urban residents by analyzing the statistical data over the years, and Rural household consumption presents the situation of lack of consumer demand. The third section summarizes the consumption of rural residents problems, such as the low consumption rate of rural residents, rural household consumption on a steady decline in contributions to GDP, etc. In the fourth part, I research the factors of restricting rural household consumption and do an empirical study on it, and find income plays a significant role in rural resident consumption. Finally, from the perspective of improving the income of rural residents, Propose corresponding policy recommendations to enhance the consumption level of rural residents.

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CLC: > Economic > Economic planning and management > Economic calculation, economic and mathematical methods > Economic and mathematical methods
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