.1978-1998 China's Consumption Of - And Lack Of Consumer Demand

Since 1978,there have been great changes in Chinese domesticconsumption Although final consumption rate has decreased from61. 8% (1978) to 58. 4% (1998), final consumption total (58. 4% ofGDP) reached 46405. 9 billion yuar in 1998, whose 80% is citizenconsumption (the proportion has been stable during the past 21year ). However, the marginal propensity to consume (MPC)flunctates greatly especially for ruarl citizens. The consumptionstructures both for rural and urban citizens have been developingwith income increasing. Engle's laws, therefore, find a concivingexample. lowin─comers have larger propensity than high incomers,whose incomes transfer actual consume easily. Consumption rigiditymakes it possible that consumption changes can be controlled and beused in the adjustment of consumption polcies. At the present, thereare many reasons to explain the lack of consumption demand, butthe most essential reasons are lntertemporal budget constraint andthe decline of expected income grouth as well as uncertainty ofconsumption spending.Therefore, inspiring comsumption demond is the key for theeconomic grouth.