Abstract

Consumption, investment and export are referred as the main force to drive economic growth in which the demand of consumption is the most stable and important factor stimulating economic growth. Expanding consumption demand and strengthening the force of consumption rate driving economic growth have been the important macro-control measures of China. Since the 1990s, on the one hand the economic situation is better and better in both sides（macro economy and micro economy）but on the other hand the consumption rate in China has been continuously decreasing.

A view accordant with present-day ideas is that the consumption rate in China is abnormally low. When analysis such phenomenon, firstly, the scholars at home and abroad believe that the residents' income increasing slowly and expectation change form the low consumption rate and the impetus of the consumption rate decreasing. The second, they think that the high investment rate invades the consumption rate and make it low according to the macroeconomics equation（aggregate demands＝consumption+investment+net export）. While, abnormal consumption rate of China is a debatable conclusion that how to explain the macro economy running better if the consumption rate is abnormal. Moreover, it left a lot to be desired in interpreting the causes why the consumption so low because the consumers'behavior is just a disturbance. It is reversed that believe too much higher investment occupies the consumption rate with the decision of aggregate demand of macroeconomics.

Correct understanding of the fact that the situation of the consumption rate running is essential to clarify the relationship between consumption rate and eco nomic growth in theory. Moreover, there is an important applied value to the policy decision in practice. Therefore, in order to obtain a scientific answer, this book gives a new interpreting about the consumption rate low and continuously getting low.

In the first place, the sound theoretical foundation is build with the classical literature which studies the influencing factors of the consumption rate.

Secondly, it is concluded that the consumption rate of China is determined by the complicated inner rule of the economy itself running（It just can be judged by weather the economy run sustainable and healthily. In the other words weather the reproduction can be realized）and the lower consumption rate is balanced one for it is a low level balance of Keynes' and its operating is in the normal scope. The conclusion above is drew by the running situation of consumption rate studied since 1990 by the trend observed with data, the degree judged with comparation and the normality tested with empiric. The consumption rate is not in the best state and there is some space to increase though it not influences the economy running normally. According to the its inner running regulation of the economy itself a basic judgment about the consumption rate in China can be made that the economic development stage is the determinant to decide the level of consumption rate and the changes of political and economic system and the expanding of income gap are the disturbing factors at present. An analysis frame of development economics is built up in which the influencing mechanism of consumption rate to system changes, expanding income gap and economic development stage is tested respectively.

The mechanism chart of consumption rate influenced by the system changes is drawn when the content and course of system changes are studied; the degree of income gap is evaluated with a new method and the influencing principal is tested when the affecting of income gap to consumption rate is checked; A consumption material conditional model is constructed to illustrate the low consumption rate reasonable necessity nowadays by a variety is found which can represent the economic development stage and can correspond with the consumption rate. The long term relationship between the economic development stage and the trend of consumption rate is discussed to refer the hypothesis that long term consumption rate assume “U” type and its theoretical analysis and empirical testing is done.

Finally, endogen and exegetic factors influencing consumption rate are defined and the affecting degree to consumption rate is analysis respectively by the empirical model influencing factors of consumption rate constructed. It is concluded that the increasing of per capital, the decreasing of Engel coefficient, and the normally rising of the Gini's coefficient are regarded as the force to reduce the consumption rate, while the rising of the urbanization level are regarded as the resistance to the consumption rate reduction, thus the trend of the consumption rate curve depends on the joint force. The long-term and short-term trend of consumption rate, per capita income level, Gini's coefficient, Engel curve, and urbanization level is divided into 4 zones, in which simplified time sequences diagrams of every curve are drawn to analyze the unique character of every zone. Empirical testing is made to check which zone China is in and reveal the stage characteristic of the trend of consumption rate at present.

Key Words: Consumption Rate, System Changes, Income Gap, Economic Development Stage