Research On The Impact Of China's Assets Price Fluctuations On National Consumption

With the rapid economic and social development in recent decades, the fluctuations of assets price have a growingly noticeable effect on the national economy. As the main part of the assets, stocks and real estate assets have become an important component of our national wealth. While they also put impact on the national consumer spending by the wealth effect, substitution effect and other channels. The fluctuations of assets price may make people feel the increase or decrease of their wealth, and then change their consumption. When the prices of stocks and real estate assets fall, people reduce their own consumption expenditure; when the prices rise, people increase their own spending.However, due to the differences between stocks and real estate assets in the objective situation, assets nature and the wealth effect, their impact effects on the national consumption differ. The empirical research shows that the impact of the stock market on China's national consumption is much weaker than the real estate market. This is broadly in line with other domestic scholars study in this issue. The development of China's stock market is rapid, but the wealth effect is weak. The reasons of this fact lie in the uncertainty of Chinese residents' expectation on the future income, the imperfection of the social security system, the unfairness of the distribution system of social national wealth, and the imbalance of wealth distribution in the stock market. At the same time, because of the substitution effect, the stock market has a little negative effect on consumption.But the price fluctuation of the real estate market has a significant impact on resident consumption. After 1998, when the State Council announced the cancellation of welfare housing distribution system, real estate market in our country has made great strides forward. Benefited from the dual property of investment and consumption, and being closer with residents' daily life than stocks, the effect of real estate on consumer behavior of the residents is even more obvious, and then real estate plays a more prominent role in driving the overall economic performance.Therefore, the stock market, which has not great pulling on the national consumption in the current time, should focus on solving the problems limiting its development so as to play its due function of the wealth effect. For the real estate market with the great significant wealth effect, it must continue to play a positive promoting effect to provide strong guarantees for promoting the residents'consumption, so as to stimulate more balanced and healthy development of our national economic in the long term.