Research On The Influencing Factors Upon Residents' Consumption And Improvement Countermeasure

The global financial crisis which originated from USA has not only heavily hit the world economy, but also tremendously impacted the economic development of China, furthermore highlighted the urgency of Chinese economic development model transformation. It has already become a consensus as well as the aim of economic policy to expand the domestic demand especially the consumption demand. To truly achieve the objective to promote the consumption particularly the resident consumption, it is necessary to sort out the problems concerned and to adopt pertinent measures. The resident consumption is an important force driving up economic growth and also guiding the reform. However, the recent continuous under-consumption will directly affect the future economic development and improvement of people's living standards. Accordingly, resarch on factors affecting the current resident consumption growth is of important theoretical and practical significance for coping with financial crisis and expanding domestic consumption.It is based on the above background that following study has been done in this paper:1. Through detailed reserch and investigation, we analyse in depth the main manifestations and reasons for Shandong's domestic demand insufficience and under-consumption. On account of this we can find out two inspirations to expand the resident consumption: first, reduct the security and precipitation savings for health and education, and temporary savings for large consumption items (house, car). Second, stimulate the resident consumption upgrading, promote the transformation from savings to consumption.2. Through analysis and comparative study of mass data, we remark that the resident consumption structure in Shandong province presents following trends: First, the Engel coefficient is marked with decline for both urban and rural residents. Second, from 1981 to 2009, a certain difference exists between the consumption expenditure structure for urban and rural residents. Third, from 1980 to 2009, GDP per capita of Shandong's urban residents grows most fast, whereas obviously the revenue whose growth is relatively slow doesn't increase in propotion. Four, from 1980 to 2009, the Gini coefficient for Shandong's rural residents increases year by year, generally from 0.2 to 0.4 within the normal range.3. We analyse in depth the envionmental conditions of expanding Shandong's domestic demand and increasing resident consumption with method SWOT.4. We discuss Shandong's resident consumption structure on basis of the method PCA (principal component analysis). We find that the engel coefficient is declining year by year, but food expenditure is the most important factor in residents' consumption structure.5. We propose from the view of public finance some detailed policy to encourage the resident consumption, doing adequate analysis in aspects of housing, medical insurance, social insurance and employment, with corresponding countermeasures including respective aims that should be achieved and measures which support their implementation.6. Based on the above study, we propose the general idea, the development goal, the main tasks and the major measures for Shandong province to expand the domestic demand and to increase the resident consumption.