Analysis On The Cause Of Fluctuation Of Consumption Ratio In China Since Reform And Opening-up

Consumption ratio is an important basic indicator to reflect economic structure. With China's current consumption ratio hitting the bottom, Chinese government as well as many scholars have shown great concerns about it. Taking this abnormal phenomenon as a starting/cutting-in point, the author makes an analysis of the cause of it on the basis of reviewing the fluctuation of domestic consumption ratio and accordingly comes up with some countermeasures. At the beginning of the article, through the comparison of current ratio with historical and international data, especially with "standard configuration" ,the author reaches a conclusion that our consumption ratio is below the normal level, which is mainly caused by the low ratio of residents while the public consumption ratio is kept relatively stable. Then an analysis of the causation is given from two perspectives: one is the income factor and the consumption propensity of residents, according to the definition of consumption ratio; the other is effective supply. Finally, based on the above analysis/reasoning, corresponding practical and specific policies are suggested to improve China's current consumption ratio properly.