A Study On Adjustment Of Investment And Consumption Of China From The Perspective Of Internal-external Economic Equilibrium

In the open economy, the aim of macro-economy controlling is to keep macro-economy internal balance and external balance, namely macro-economy equilibrium implies internal balance and external balance simultaneous. In recent years, Chinese internal imbalance and external imbalance are worsening. Internal imbalance manifests overplus of save, increasing investment, and consumption, especially resident consumption is shortage; external imbalance manifests the increase of"twin-surplus". Thus, foreign exchange has been increasing fast and Renminbi has the pressure of appreciation. Internal imbalance is primary and decides external imbalance. At the same time, external imbalance aggravates internal imbalance.After inspecting China's economy from the angle of internal and external unbalance, this paper gets the basic reason of the presently dilemma still is unbalance of investment and consumption by empirical analysis and theoretical analysis of the interrelation of internal and external balance. In order to lighten or remove the internal and external unbalance, we first have to restructure domestic economy, stabilizing the investment and encouraging the consumption should still be sustained. The paper analyzes causes of investment and consumption imbalance from the angle of the fiscal and taxation system led by the government, income distribution system and public fiscal system, and propose the train of thought and policies for adjustment.On the basis of open Macroeconomics, this paper uses equilibrium analysis method, deductive and induction method, adopts positivism and normative analysis to discuss the relationship mechanism between internal and external imbalance. From history point of view, This paper summarizes general characteristics of internal and external imbalance since the reform and opening up, states causes which lead to internal and external imbalance, and make the policies of macro-economy controlling more efficiency and science in order to promote fundamental shifts in the mode of economic growth.