Analysis On Impact Of Urban Resident's Consumption On Economic Development

Since 2008, for the American financial crisis, our country suffered a strong impact on economic growth. In order to effectively cope with global financial crisis, our country adopted a series of policies aimed at expanding domestic demand, to start domestic consumer demand has become a key factor for economic development. As for the residents'consumption status quo, it is imperative to improve the consumption rate and to optimize the consumption structure.China's consumption rate is at a low level in the world, basically lower than the world average 20% , and annually declined in recent years. In contrast, although the consumption rate of China's urban residents is slightly decreasing, the decrease is smaller than the rate of total consumption , simultaneously urban residents'consumption has become the main part of the consumer. Consumption of urban residents on the role of economic development is also very important that, from 1979 to 2007 ,the consumption of urban residents annually contributed to GDP growth rate of 29 percent on the average, and pulled the GDP growth of 2.7 percentage points every year. It is testified by Grey Relational Analysis that the correlation coefficient between the urban residents'consumption and the economy development is up to 93.5 percent, significantly higher than the correlation coefficient of rural residents'consumption 76.6%. In addition, making an international comparison, China's consumption of urban residents is optimizing through the survival type to the entertainment and development type, but the Engel's coefficient and the consumption of health care are higher then the average of the world , while the housing consumption and other goods and services consumption are lower.In the long run, the changes and upgrades of the consumption structure are the source of promoting economic growth, it plays an origin and basic role in impacting on economic development and industrial structure optimization. It is obtained the order of importance with three factors separately for survival and enjoyment factor, health factor and clothing factors, by using factor analysis in China's urban residents expenditure data of 31 provinces and autonomous regions 2007, Cluster analysis of our country consumption structure of residents from 1981 to 2007 divided the changes into stages, the consumption structure of urban residents has undergone four major stages, respectively 1981-1984,1985-1992,1993-1998,1999-2007. Facts have proved that these four stages of changes in consumption structure are similar to the industrial structure changes, thus the impacts of economic development are also in line with reality. It is further illustrates the linkage of the optimization of economic structure and industrial structure with economic development.This article brings forward a series of policy recommendations of how to improve the consumption rate, and optimize the consumption structure. To improve the rate of consumption requires adjusting the proportion of investment and consumption, followed by increasing the urban residents'disposable income; thirdly to set up a sound social security system that covers the entire society; and fourthly to implement various measures to encourage consumption between different income groups of urban residents .To optimize the consumption structure needs to reduce the regional income disparities, and further optimize the industrial structure, to develop the consumer credit, and finally to cultivate new consumption hot spots.