The Imbalance And Its Correction Of Investment And Consumption In China

From 2001-2007, China's economic growth has been maintained at around 9 percent, economic growth is very fast. But in the economic structure of the internal imbalances, namely the imbalance between investment and consumption. On the imbalance between investment and consumption issues, academics have conducted a lot of studies, the paper referring to the results of previous studies on the basis of using the latest data, the imbalance between investment and consumption and countermeasures to be taken in the re-understanding and research.Investment is certain assets (tangible or intangible) invested in the cause of some kind of object or to obtain a certain income or social activities. According to different classification standards, investment can be divided into different categories. In economics, the main tangible investment, in particular to the social investment in fixed assets. Investment is decided by a lot of factors, in accordance with the Keynesian theory of investment, investment is decided by the marginal efficiency of capital and interest rates, investment and the corresponding consumption, the paper elaborated several consumer theories, suggesting that the consumer income is the determining factor. But in the imbalance of investment and consumption, must be based on the reality of China's economic development, investment and consumption theory must be amended to better explain the imbalance between investment and consumption. To analysis imbalance between investment and consumption must be clear from the theory of the relationship between investment and consumption. From the analysis of previous scholars, we can know that the relationship between investment and consumption mainly as follows: the relationship of production and consumption, savings and consumption, supply and demand, investment decided by consumption.In China, the imbalance between investment and consumption is mainly expressed in excessive investment and inadequate consumption. Insufficient consumption growth is not an absolute shortage, but the growth in consumption outpaced GDP growth, and far exceeded the growth of investment in GDP growth. In China, the high rate of investment is not high all the investment industry, it mainly refers to the investment structure and the scale of investment unreasonable. And the low consumption rate, through analysis of the data and comes mainly from the low consumption of rural residents in household consumption and government consumption . And the imbalance between investment and consumption due to various reasons, the following will be on the high rate of investment and the reasons for the low consumption rate.The reasons for the high rate of investment, mainly in the following areas:Firstly, the history of China's development stage in fixed assets maintained a high growth rate is the fundamental reason . As our country has been in a medium-term industrialization and urbanization speed up the development stage of economic development, capital formation and accumulation of economic growth is important; Secondly, the high savings rate leads to high rates of investment. Savings is source of investment .Investment is the use of savings, a relatively high savings rate is bound to lead to higher rates of investment. And China's high savings is not a major contributor to the residents savings, but the savings and enterprise savings. Government mainly due to the high savings in the provision of public products to a "vacancy" with the result that government consumption low. Enterprise savings mainly due to excessive high proportion of state-owned enterprises and non-profit private enterprises dividends and financing difficulties. State-owned enterprises, the Government and the banks led to a marriage relationship with the local overheating investment the past 10 years, state-owned enterprises do not surrender after-tax profits to the state, which house a large number of enterprises idle funds for re-investment. And the development of private enterprises and the banking system led to a shortage of its loans less, had to rely on its own funds for re-investment.Thirdly, the mode of economic growth has not been fundamentally changed. As China has been using the extensive mode of economic growth, especially for some local governments did not establish a scientific concept of development and correct performance concept, blind investment and low-level redundant construction.Finally, the liquidity surplus. Excess liquidity mainly referring to the excessive volume of the release of money, the money supply than demand for the currency, these surplus funds need investment demand for a way out, there have been overheated investment.The reason for the low consumption rate is multifaceted, mainly in the following aspects: First of all, the urban-rural dual structure hampers the ability of the Chinese people's consumption. The income of urban and rural residents in the level of consumption, lifestyle, and so there are very great differences between the urban and rural areas and they do not have to a large extent complementary ,which leads to a lack of overall market consumption hot spots.Second, the widening gap between the income of residents. According to western economics theories, the marginal propensity consume of different income sectors is different. The rich have lower marginal propensity consume , the poor have high marginal propensity consume. In China in the account for a large proportion of low-income, low consumer society as a whole.Third, the social security system is relatively weak. As China's social security system and reform in the new stage, we can not just play its due role. Therefore, the residents will reduce their consumption to savings.Finally, the low level of income of the farmers. Consumer demand growth is mainly affected by the level of consumer purchasing power, and the level of purchasing power mainly by the level of income growth conditions to decide. As irrational structure of agriculture, farmers scientific and cultural quality low heavy burden on peasants, and some other reasons for the slow growth of farmers income, which led to lower consumption of the peasants.Above the high rate of investment, the reasons for the low consumption rate, in order to make China's economic growth to maintain steady and rapid development, we must address the imbalance reasons between investment and consumption, the main response. Reduce the rate of investment specific measures, mainly on the quantity and quality control, mainly in the following areas:First, continue to control the scale of investment in fixed assets excessive growth. In 2007 and the government work report, referred to the need to strictly guard the land, credit gate; strictly control new projects, in particular the need to control the scale of urban construction, and other measures to control the scale of investment in fixed assets excessive growth.Secondly, the change of the economic development, optimizing the investment structure, raise investment efficiency. In the 17th on the proposed change by the change in the mode of economic growth for economic development, mainly for controlling the blind investment and low-level redundant construction, and continue to strengthen macro-control of real estate. At the same time, there should be a reasonable performance evaluation standards, with GDP simple change to the performance evaluation standards officials.Finally, the use of the financial and monetary policies. Mainly through the tightening of monetary policy, using interest rates to regulate investment. Rising interest rates, the rise in the cost of financing the one hand, a reasonable guide credit growth on the other hand, can change people's investment structure.The increase in the consumption rate is the main countermeasures from the perspective of income, especially the income of rural residents to increase consumption, mainly in the following areas:First, speed up the process of urbanization. The process of urbanization can not only promote investment, but what is more important is that the consumer will have a clear expansion effect. Urbanization can be a large number of surplus rural labor transfer out, and could change the way of life of peasants, thereby increasing their consumption.Secondly, the increase of urban and rural, low-income income, and narrow the gap between income levels. Increase the income of residents in urban and rural areas, mainly raising the average consumption tendency. According to rural and urban low-income groups in the different characteristics of different strategies to increase people's income. In addition, we can also use tax revenue to adjust the income gap between different.Third, improve the social security system and reduce the residents of preventive savings. Mainly through the expansion of coverage, raise the level of play in the social security tax and the role of social security management services and other measures to reduce the residents of preventive savings, increase current consumption.Finally, stimulate the rural consumption, and increasing the income of peasants. There are many measures to increase the income of farmers , but this mainly relates to three points, It is necessary to raise the scientific and cultural quality of the farmers get rich Second, the development of rural financial markets. The development of the rural financial market, not only for farmers from agricultural to non-agricultural industries to move a certain amount of capital support, but also accelerated the development of private enterprises in rural areas; three characteristics is the development of agriculture, farmers incomes broaden channels.In this paper, although the imbalance between investment and consumption issues related to the study of the system, but the investment and consumption to a reasonable relationship, which need for a long-term process. The multiplier effect of investment is a "double-edged sword", it is necessary for a reasonable adjustment in investment and consumption, the economic growth to avoid big fluctuations. Only in this way will be yet fast economic development.