A Research On The Consumption Potential Of China Based On Human Need

The expansion of domestic demand is the strategic basis of the social and economic development of China. The implementation of the domestic demand expansion strategy requires the knowledge of where lies the consumption potential. Therefore, consumption potential is always the hot issue concerned by Chinese government and the academic circle. At present, the academic study of the consumption potential is mainly focused on the aspects of capacity evaluation and development mechanism. The study of the traditional economics starts from the classic consumption function, making the change of income as the only index of forecasting consumption potential. Later, many western economists transformed this index into the expected income、permanent income、 temporary income、income uncertainty to forecast consumption potential. Although all these consumption theories reveal the relationship between income and consumption under its own prerequisite, they are unable to explain the following problems:in an economic society which is full of "need", why the satisfactory consumption need is always lower than the satisfactory consumption capability? That is to say, why the extra consumption capability couldn’t be changed into consumption demand? Why the consumptive mass is not enough?Most domestic scholars study consumption capability from the perspective of income index and its variation, and in turn put forward many policies and proposals to stimulate consumption by raising income. But the reality shows that when the people are fairly well-off, the strategy of stimulating consumption through raising income is mostly ineffective, which can be concluded from the fact that our national ultimate consumption rate is on the decrease and is also less than that of most countries in the same period. The rise of behavioral economics, which introduces the psychological variable of "willingness" related with consumption. Behavioral economics also points out that consumption is not only relevant to income, but is also closely related with human need. When the basic need is satisfied, the consumption of the higher-level need for enjoyment and development is constrained by human need. It is a typical fact widely acknowledged by the academic circle that human need differ with the characteristics of the consuming public. Differentiating the influential factors of different groups’human need and its differences makes the formulation and implementation of consumption need more pertinent. Due to the scarcity of micro-data, there is lack of the domestic research achievement of consumption potential of human need, there is even less of those of human needs of different groups. In view of the limitations of the study of consumption function theory carried out by overseas scholars and the one-sidedness of study of consumption potential by domestic scholars, from the totally new perspective of human need, the thesis try to replenish the study of the relationship between consumption and human need, and correct the perspective of deviation in traditional economics study. The study of the consumption potential from the perspective of human need is in accordance with the definition of consumption in Marshall’s micro-economics, with the category of the starting point of political economics, with starting point of the construction of civil engineering, with the direction of our enterprises development.The thesis is theoretically based on the theory fulcrum of relationship between human need and consumption potential, centered on the core subject that the satisfaction of human need is China’s greatest consumption potential. The thesis is divided into7chapters. Chapter1is introduction, which mainly presents the background, research framework and method, innovations and values. Chapter2to chapter7is main body, consists of four parts:Part1, the cause and status of China’s inadequate consumption, including chapter2. Part2is the construction of the theory fulcrum, including chapter3. Part3, use the relationship between human need and consumption potential into the research of different income groups, including chapter4,5and6. Part4is the develop of China’s consumption potential, including chapter7. The main research content of every chapter and its important viewpoints go as the following:Chapter2, firstly define consumption inadequacy on the basis of dispute on "Chinese consumption inadequacy" by the domestic scholars. Then analyze the current status and cause of consumption inadequacy. Finally analyze the current status and effect on government consumption.Chapter3, firstly use the classic syllogism of deductive method, to replace the willingness of human need and behavioral economics consumption function. Then analyze the four kinds of relationships among three variables of consumption function in behavioral economics---the relationship between consumption and income, the relationship of consumption, human need and income, the relationship between human need and income, the relationship between consumption and human need. What correspond with consumption is need, what correspond with consumption potential is human need. Besides, the consumption potential index is also introduced. On the basis of above, construct the relation between human need and consumption need. The low-income groups have no income but need consumption potential; medium and high-income groups have income, but lack needed consumption potential. Further speaking, under the prerequisite of presumed no constrain by currency (the income of high and low-income group could guarantee the consumption, but consumption need is inadequate), the relationship between inadequate need for enjoyment and lack of development need and consumption potential. After demonetization (people with no income or low income),the relationship between low-income group which is guaranteed by government’s civil engineering and consumption potential.Chapter4firstly define the human’s basic need, and then expound the criterion for satisfying the human’s basic need, and then do research on consumption situation of basic need and theoretical consumption level of fulfilling basic need. On the basis of the above, through the comparison between consumption situation of basic need and theoretical consumption level which fulfills basic need, to evaluate the consumption potential of basic need. The consumption potential of low-income group comes from the consumption fulfilling survival and respectable daily life, which is guaranteed by government’s civil engineering, and the consumption potential of basic need is evaluated as456.4billion RMB.Chapter5firstly define the enjoyment need and relevant definition and analyze the consumption content of enjoyment need and economic standard and code of ethics for judging enjoyment need,and making double standard as the basic line for encouraging enjoyment need. Then, from the perspective of human’s micro-physiological and psychology, analyze the consumption carrier. Through the analysis of consumption situation of enjoyment need, and compare with the market openness of enjoyment need in the developed countries, and evaluate the consumption potential of our country. The enjoyment need of the medium-level income groups come from the new product and new service development which conform with economy and ethic double criterion. Through creating consumption needs and creating consumers, seeking for and creating new values, the consumption potential of enjoyment need is evaluated at11165.4billion RMB.Chapter6firstly define the development need and related concepts, and then analyze the present situation of development need,utilize the research way of behavioral economics to study the influencing factors on development need decision-making. Lastly estimate the consumption potential of development need. The consumption potential of development need is from two directions, residents and the government. By2010base, it is estimated that the foreign education potential of high income groups is100billion RMB, the public education expenditure is650billion RMB.Chapter7analyzes the orientation of China’s consumption potential in the future15years. In the normal situation, when there is no new measure to stimulate consumption or to naturally release consumption potential, the consumption rate of domestic citizens will continue fall down in the future15years, the consumption rate will definitely fall down6.5from0.35in the year2010into0.29. then the mode of depending on import and government domination to realize economic development could not change. In the policy circumstance, fully implement the declared policy of promoting consumption, if at the government set economic growth rate of7%, through the adjusting resident income percentage and citizen’s consumption inclination, our nation’s citizen consumption rate is estimated to reach0.47in the future15years, which is far below the level of other main economic center. In the development circumstances, to develop consumption potential through the content of humanist needs, to fulfill the need according to the openness f the developed countries. The national citizen’s consumption rate is estimated to surpass0.60, of which our domestic consumption rate is in the same level as that of the European and Asian countries. Lastly put forward three kinds of consumption potential of the develop orientation and measure, respectively for basic need, enjoyment need and development need.The consumption potential of basic need is the basis of domestic demand expansion, and those of the enjoyment and development need is key to enlarging domestic demand. The value of the thesis lie in pointing out the development direction of consumption potential, evaluating the capacity of consumption potential, and providing references for government’s strategy of domestic demand expansion.