Insufficient Domestic Demand Analysis Of The Reasons

After three years of regulation ,China抯 economy finally achieved a suc- cess Jul 搒oft landing?in 1996. Most people anticipate that China抯 economy will step into a new high ?growth stage. However, main indicators of macroe- conomy such as GD? growth rate, unemployment rate, inflationary rate and money supply have shown that China抯 economy has experienced a radical change ??insufficient demand in real sense has appeared in the first time. The restrictive of demand instead of the shortage of supply has become the main element restricting economy growth. This is not only the sign that the market system is becoming maturer, but is beneficial for enterprises to transit their mode of growth and operational mechanism. But insufficient demand is a two edged sword, which blocks investment and deepens the descending trend of economy. As to the phenomena of insufficient consumption and investment at pvesent ,China抯 government has adopted a series of positive fiscal policy and moderate monetary policy to stimulate internal demand. Alt housh these policies has achieved some prominent effects ,the economic situation has shown that the government抯 ability of adjusting macroeconomy to maintain econmy growth is facing more and more serious challenge. The facts reveal that China抯 economy hasn抰 really restore its growth ability. If economy growth still depended on government expenditure instead of enterprises investment or residents con- ?? sum ption , it will be possible that China抯 economy will slide into a very diffi- cult situation. In order to avoid such consequences, we must have a second thought on the reasons and characters of insufficient internal demand. This thesis includes four parts. The first part is the analysis of the macroeconomic situation in recent years. By analyzing some main macroeconomic indicators, We can see that China抯 economy has already changed from 揾igh growth ,high inflation and low unemployment?in early stage of reform to 搇ow grow, low inflation and high unemployment?at present. The principal aspect of the contradiction be- tween supply and demand has tunned from the shortage of supply to the re- strictive of demand. China抯 economy has appeared the insufficient demands zn consumption and investment the first time since reform and opening. This part is to raise question. The second part is about consumption demand. This part analyzes the deep reasons of the insufficient consunption from three aspects : the worsening anticipation of income and expense ,the unbalanced income distribution and the structure contradiction between supply and demand. It points out that the poli- cy of expanding consumption should be combined with the improvement of structure and the construction of social security system. Otherwise this policy will only lead to temporary effect not the long梩erm economy growth. The third part is about investment demand. This part states the reasons for insufficient investment mainly from two aspects: one is the overabundant ?? productive ability caused by long ?time overlapping construction which af- fects the investors?anticipation; the other is the unreasonable investment and finance system which ca...