Drivenfiscal policy on consumption growth Suggestions

1、 driven by fiscal policy on consumption growth suggestions abstract: this article is too low from the start of chinas annual consumption rate to explain the three reasons for this phenomenon: economic growth, income growth and lack of coordination, the income gap is too large and the national policy

2、 is imperfect, which leads to the use of fiscal policy boost consumption growth requires tax cuts, transfer payments, a tax reform, optimize the fiscal expenditure structure and support the three rural in order to achieve the same time to take timely fiscal policies, chinas rapid economic developmen

3、t. keywords: fiscal policy, consumption rate, the marginal propensity to consume, disposable income introduction: todays china is a world-class developing country since the reform and opening up, our economy has achieved rapid development of the gdp in 1977 from 10.7% achieved rapid growth began in

4、2007, achieved 14.16% the rapid growth despite the global financial crisis in 2008, dropped to 9.63%, 9.11% in 2009, but its growth rate is still far exceeds the pace of development of some developed countries economic growth is usually measured by gdp, while consumption and investment has formed a

5、core part of gdp, total investment demand is the least stable part of the total demand of consumption is the most direct effect of factors, but with the important part, consumption and investment but has a distinct trend according to the national bureau of statistics, chinas final consumption rate s

6、ince 2002 has been a downward trend: 59.6% in 2002, dropped to 56.8% in 2003, 54.3% in 2004, was 51.8% in 2005, 2006 was reduced to 49.9% in 2007 to 49% in 2008 was 48.6% in 2009 47.7%, in sharp contrast with this investment is steadily rising: 2002 was 37.9% in 2003 to 41% in 2004 43.2%, followed b

7、y three years, has been hovering between 42% -43%, to 2008 reached 43.5% in 2009, it rose to 48%. thus, consumption and investment is extremely uneven. consumption and investment relations within the structure of demand, in this structure, consumption, investment and net exports between the three mu

8、st maintain a certain amount of relationship if the investment rate is too high, the scale of investment over the economic surplus capacity to produce a large supply of products demand in the market, the investment demand growth will eventually lose the support of this difficult to sustain economic

9、development, therefore, to implement the proactive fiscal policy, the development of effective domestic demand, consumption and investment to achieve a balance of great significance . first, inadequate consumption of a few reasons (an actual household income growth and economic growth disharmony. pe

10、oples actual income growth and economic growth disharmony, seriously affected the relationship between the proportion of gdp expenditure structure, which restricts the level of consumption to improve, according to keyness absolute income theory shows that the growth rate of consumption and income, i

11、f they slow the growth rate will lead to the relative lack of consumer demand, while the last three decades, chinas wages in addition to organs and units, teachers and other causes units, a decline in varying degrees, so the real income of our population growth rate is lower than the long-term econo

12、mic growth, leading to final consumption expenditure as a proportion of gdp declining by more than 60 years dropped to 80% of 90 60% or less, and now, only about 50% from national bureau of statistics shows that in recent years, chinas economic growth rate remained at 10%, while chinas income growth

13、 of only 8.5% in , well below the revenue growth. long-term income growth lower than the economic growth, domestic demand will inevitably lead to lower production supply, resulting in the imbalance of economic development, and ultimately seriously affect economic development. (b disparity of income

14、distribution gap, whether it is within the urban residents, or between urban and rural residents, the income gap has continued to expand. with the rapid economic development, the industry, the income gap between the various groups to become is growing, according to du senbeis relative income theory

15、of consumption is determined relative to the other persons income level and relative to my income level of the highest in history, that the income gap will lead to enhanced consumer demonstration effect, the average propensity to consume in the relative income varies according to the part of the ris

16、e, but when society as a whole unfair distribution of income, the income gap is too large, the average propensity to consume will affect the relative income changes in failing to change the part, so that the average propensity to consume and marginal propensity to consume reduced, thereby reducing t

17、he consumption of size or slow growth in consumption, according to the relevant academic statistics, chinas gini coefficient in 1978 to 0.317, while in 2000, has reached the warning level of 0.4, china social science hospital report, in 2006 the gini coefficient has reached 0.496, far more than the

18、relatively reasonable range 0.3-0.4, according to world bank estimates, the gini coefficient in europe and japan but also in between 0.24-0.36. from this we can push our income gap over the poor, seriously affected chinas consumption increase. links to free download (three national policy imperfecti

19、ons. as the economy continues to develop, prices are rising, especially housing, health care, education, pension and other aspects of daily life with the residents. hard to buy a house, difficult and other issues gradually becoming prominent, while chinas policy adjustment lag problems also led to t

20、he current solution is not well in the actual household income growth rate of economic growth can not keep up with the case, one can only be used to store most of the revenues future consumption, only a small part of the current period for the consumer. second, improve the consumption level of fisca

21、l policy proposals (one for tax cuts, transfer payments and other means to increase the disposable income of low-income consumers, the government in order to improve the overall level of consumption, through tax cuts, transfer payments and other policies, according to the relevant scholars, our low-

22、income consumers, the average propensity to consume and marginal propensity to consume is higher than high-income consumers, which means increase in disposable income of low-income consumers to improve the overall consumption level of intensity much larger than the increase in disposable income of a

23、ll consumers, the impact strength. therefore, in implementing the proactive fiscal policy in the process, should focus on the use of tax cuts, transfer payments and other measures to improve low-income consumers disposable income. for example, can increase personal income tax, while ensuring a minim

24、um wage policy, subsistence allowances for urban residents and other related systems implementation, in order to improve low-income consumers disposable income. (b actively promote the reform of the tax system, strengthen the regulation of personal income tax effect, optimize the structure of income

25、 distribution to narrow the income gap in modern economic society, the state is to control the main income redistribution, while the tax is to redistribute income countries the primary means, but china has not yet formed a complete system of tax regulation, the regulation of tax on the income redist

26、ribution effect is very limited, such as our country has not levy inheritance tax, gift tax and property tax and other specifications can be used with personal income tax, consumption tax, these related taxes complement each other to regulate the redistribution of income taxes, while the western cou

27、ntries has been playing a regulatory function of each of these taxes. oecd (organization for economic cooperation and development countries, the tax structure, 60% have incomes regulatory function, and chinas ratio is only about 10%, much lower than in western countries. friedmans permanent income t

28、heory, consumers can control their entire income and expected to be achieved and the angle of arrangement of current consumption, so and structure of income distribution policies directly affect the consumers ability and choice and only have a relatively balanced income distribution structure and th

29、e middle, two small income level, this community will have a relatively sufficient consumer demand. (c optimize the structure of government spending, protect and improve peoples livelihood, improving peoples marginal propensity to consume health care, housing, education, pension and other issues con

30、tinue to highlight the increased uncertainty of future spending, thus affecting the level of consumption as an important reason one with the continuous restructuring of chinas economy, originally from the state of affordable housing, medical care and gradually return to private hands, the individual

31、 uncertainty of future consumption increased rapidly at the same time, chinas public spending for social spending as a percentage the proportion of the national fiscal expenditure has been at a low level, far below the international average of 40% level in the national population increase future spe

32、nding public consumption spending less off than the case, the residents only reduce current consumption, the save up a lot of income to cope with the uncertainty of future expenses, so the government should optimize the structure of financial expenditure, increase in public consumption expenditure r

33、atio to improve peoples livelihood as the goal, to eliminate peoples concerns, higher marginal propensity to consume to improve our level of consumption. (d expansion of public finance coverage in rural areas, increase support for the three rural in efforts to effectively improve rural residents inc

34、ome and consumption levels of the reform and opening up, chinas heavy industry, light industry and so has made great progress, but our is still a large agricultural country, chinas agricultural population is still about 70%, so to enhance the rural populations disposable income, raising the level of

35、 chinas consumption will be very important there, the study said chinas current consumption of rural residents income there is a close link between, current income increases, consumption increases significantly, increase the income of rural residents consumption level of rural residents to increase

36、the effect is very significant, especially the increase in the current period and therefore, china implement a proactive fiscal policy, should increase the three rural support efforts by increasing the consumption level of rural residents to boost the national consumption level, for example, the gov

37、ernment can strengthen rural infrastructure construction, increase agricultural price controls and subsidies, to improve rural education and other ways to achieve greater income rural residents the purpose. links to free download third, chinas current fiscal policy in december 2010 10 to 12-day central economic work conference that chinas 2011 economic growth will accelerate the transformation of the main line, to implement the proactive fiscal policy in order to strengthen the tax on income regulation of distribution, changes to