The Research On The Consumption Rate In The Process Of Crossing "Middle-Income Trap" In China

The high speed economic growth since the reform and opening up in China has sustained for nearly30years, which has got more attention from the whole world. With the per-capita GDP reached$4433in2010, China has become an upper-middle-income country. To escape from the "middle-income trap", the greatest challenge China faces now is to realize the transition from an upper-middle-income country to a high-income country. The key to meet with the challenge is to handle the economic growth properly. Whether China’s economy can maintain its growth will be concerned by all circles of the society. Expanding domestic to boost consumption is not only a short-term policy but also a long-term strategy for China, a developing country, to lead a consumption-led economy. The report of the18th CPC National Congress stated that we should speed up the creation of a new growth model and ensure that development is b ased on improved quality and performance. We should increase motivation for pursuing innovation-driven development and create new favorable conditions for developing the open economy. This will make economic development more by domestic demand, especially consumer demand. Taking these steps will enable us to sustain long-term development. Obviously, we should lead a pro-consumption development pattern transformation and maintain scientific and consistent development in order to escape from the "middle-income trap".Consumption rate is a structural index representing the share that the final consumption takes in the total demand. It reflects the economic situation in the whole country clearly and can guide the formulation of macro economic policy. According to different subjects, consumption rate can be divided into citizen consumption rate and government consumption rate. They interact with each other and influence the change tendency of consumption rate jointly. Since China has become an upper-middle-income country in2001, its consumption rate, especially the citizen consumption rate, has declined linearly, which indicates that the key to expand domestic demand is to activate the consumption rate.Under the guidance the economic growth theory and consumption theory, the dissertation presented an analysis on the affinity between economic growth and consumption. And a discussion on the impact that consumption has on crossing the "middle-income trap" was provided in terms of theory. Combined with Chenery-Syrquin Consumption Standard, the dissertation also analyzed the relationship between per-capita GDP and the consumption rate of the "middle-income trap" internal, on the basis of which, it further analyzed the change tendency of consumption rate of the "middle-income trap" internal, which was then compared with China’s change tendency of consumption rate. By empirical analysis and quantitative analysis, the dissertation presented the relationship between citizen consumption rate and government consumption rate. Finally, by using the experience of other countries for reference, some suggestions on how to avoid the "middle-income trap" in consumption-oriented society were proposed from the perspective of the influence of government consumption on citizen consumption.