The Change Of Investment Rate And Consumption Rate In China

Investment and consumption are two carriages of economic growth. But now the investment rate in China is too high and the consumption rate is too low. The unbalance of consumption and investment becomes the barrier of expanding the domestic demand.First, this thesis reviews the history of investment and consumption in China since 1952. It finds that the changes of investment and consumption rate are decided by the synthetical effects of the changes in demand structure, the changes in the economic system, the particular development stage of our country and the business cycles.Second, this thesis compares relationship between investment and consumption worldwide. It finds that the tendency of investment and consumption rate in our country accords with the general rule of the change of investment and consumption rate in industrialization in the world. But compared with the same development stage of some other countries, the consumption rate in our country is obviously lower.Third, this thesis educes the reasonable range of the consumption rate in our country is [61%,65%], accordingly the reasonable range of the investment rate is [35%,38%].And the author predicts the reasonable annual growth rate of consumption in the next five years is 8.7%, and the reasonable annual growth rate of investment is 14.9%.The conclusion of this thesis is the problem existing in the system of investment and the low consumption rate in our country will aggravate economic instability in the coming years. So, we should take effective policies to control the growth of investment, improve the efficiency of investment and increase the consumption demand to insure the stable and sustainable economic growth.