The Effects Of Consumption Demand On Economic Growth In Shan Dong Province

Since openness and reforms, the market process of Chinese economy has quickened, and the contributions of consumption demands to economic growth have been more and more obvious. Consumption has a proportion of two thirds in GDP, so it can not only directly push economic growth through own increases, but also indirectly push economic growth through pushing investment. Since Shan Dong province has a large number of population, increases in domestic demand is more important, which has always been the standpoint of our economic development. To encourage and guide consumption, our province has enacted many policies and measures. In recent years the consumption structure has been obviously improved, consumption levels have been increased. However, many problems still exist. The government working report in 2006 pointed out that, the relationship between investment and consumption is not harmonious, and the low income in rural areas leads to low consumption abilities. How to instigate consumption and promote the stable growth of economy is a problem faced by our province.Using data from Shan Dong Annual Statistics, this paper analyzes the effects of consumption demands on economic growth in Shan Dong province, investigates the motives for economic growth in Shan Dong province and relevant problems, and puts forward several suggestions on policies. The framework of this paper is the following:The first chapter is an introduction on the backgrounds, main contents and concepts, methods and innovations. The second chapter is a summation on relationships between consumption and economic growth. The third chapter is a theoretical analysis on effects of consumption on economic growth. Theoretically, consumption demands have direct and indirect effects on economic growth. An economy can rely neither on unlimited increase of investment nor on exports. Compared with investment and export, consumption demands are more permanent and more stable to economic growth. The fourth chapter is an empirical analysis on effects of consumption on economic growth, based on which the paper pin down the factors that affect consumption. The empirical results show that, consumption demands have the most obvious pushing effects on economic growth, which is consistent with former theoretical analysis. The last chapter is main conclusions and proposals.Combing empirical analysis and normative analysis, qualitative analysis and quantitative analysis, this paper analyzes the effects of consumption on economic growth from the standpoint of Shandong province. Furthermore, the paper analyzes the factors that effect consumption in Shandong and proposes several suggestions to expand consumption, which studies some advent consumption problems, and is useful to master the status quo of consumption in Shandong and to enact consumption policies.