Insufficient Effective Demand In China Causes And Treatment

After the soft landing of macro-economy by the end of 1997, people have been confronting with the over-manufactured products, the rising inventory, the price-lowering tendency and the lowest rate of average profit instead of economy shortage. The insufficiency of effective demands which is the main obstacle in inner increase of economy and dissatisfies the measures with which the government has started and applied to stimulate the economy. The study of insufficiency of effective demands, undoubted fully, talks a lot.This thesis, Set out from the big system of social and economic, adopted the inquisition and estimate, construction function the analysis from our and, calculate the economics to evaluate the method with system, however, will systematically do some settle the sex and fixed amount researches on the insufficiency of effective demands from its features, reasons to originate it and bring up the measures to eliminate it. Under Economy Theory of Marxism and Westerners, this thesis, firstly, illustrates the problems in running of macro-economy on basis of index in macro-economy and in recent economy development. In recent years, these problems are to be somewhat overcome, but there are still large gaps far from the perfect demands. Moreover, the insufficiency of effective demand keeps its normal appearance in market-oriented economy. The economy plays a distinguish role between capitalism and socialism.Secondly, the thesis gives a deep exploration in reasons that forms the insufficiency of effective demand. First, it states the policy-maker's standpoint--central bank's, finance's, enterprises' and individuality's. These policy-makers, in order to pursue the maximum profits, have made some resolutions, which eventually result in the insufficiency of effective demand. Second, it states the policy tendency. The government has made some policies--the highest accumulation policy, properly tense currency policy and zero inflation policy, consuming policy and fixed exchange rate policy, which certainly produces the insufficiency of effective demand. Third, it gives an analysis of the regulation which also forms the insufficiency of effective demand. These rules are property system, distribution system, wage system, law system, supplying-demanding system, investment system, financial exchange rate system, private-owned enterprises system and market--oriented system. Fourth, it from the other aspects analyzes the reasons to bring the insufficiency of effective demand into being. They are: the over surplus of working hands, the essential change of supply and demand domestic and abroad, consumers' negative anticipation, the world's economy falling down and Asia economical crisis. These are the outer factors which produce the insufficiency of effective demand.Last but not least, the thesis presents the measures we will take to get rid of the insufficiency of effective demand. In currency policy, it's necessary to enlarge the power of base money into circulation, to widen the surveillance of interest rate, to adjust the required reserves and open the channel of currency transfer. In financial policy, it's necessary to increase the social investment based on private investment and non-government controlled investment. It will stimulate the inner demand with tax policy. In economy reformation, it's necessary to quicken the reform of the state-owned enterprises, to regulate the private-owned enterprises. In foreign-trade policy, to improve the quality of import and to broaden the foreign investment to the tri-production.With the adoption of the measures mentioned above, it's necessary to solve the relations such as: government and market; equality and efficiency; measures and financial risks among currency, price of goods and economy. It's also necessary to give the following issues an arrangement to agriculture, countryside, and farmers.