On The Western Development And Expansion Of Domestic Demand In China

Up to now, we still remember the financial crisis happened in Asia 1997. With its effect, the amplitude of export falls from 20% in 1997 to 0.5% in 1998. Meanwhile, the buyer's market has come into being, with the character of the deficiency of effective demand. The government immediately takes the decision of which RMB will not depreciate and the measures to increase the issue of national debt, lower the interest rate of deposit and loan, raise drawback rate of export, etc. The policy of enlarging domestic demand is brought into effect.By 2000, national economy had a favorable turn. The policy of enlarging domestic demand is perfected in practice constantly. From simply increasing investment to both increasing investment and consumption. From short-term policies to long-term strategical ones. Then to increase domestic demand is not the present difficulty, while it has become a long-run strategy. In this year, exploitation of west region begins. The newly-builded 10 projects ^ 5 important projects in previous work and 78 large or middle scale projects makes the west region a hot land.This paper carefully analyses the situation of deficiency of domestic demand, attribute the reasons of deficiency of domestic demand to the economical disequilibrium between regions, and advance that it is an important way to put the strategy of exploiting the west part into practice for increasing domestic demand and getting rid of the economical disequilibrium between regions.This paper is divided into 4 chapters:Chapter 1 is a simple investigation of the deficiency of effective demand. The existing analyses on the reasons of deficiency of domestic demand mainly include the theory of consumption-deficiency *. the theory of investment-deficiency and the theory of regional disequilibrium. The theory of consumption-deficiency believes that the reason of deficiency of domestic demand is consumption-deficiency; the theory of investment-deficiency believes that the reason of deficiency of domestic demand is investment-deficiency; while the theory of regional disequilibrium thinks that the economical disequilibrium between regions is the main reason of deficiency of domestic demand.Chapter 2 thinks that traditional intervening-policy has worked, but it is just a kind of short-term activity and cannot resolve the deficiency of domestic demand. For the long run, the structural adjustment is necessary. Therefore, I think it is right to put the strategy of exploiting the west part into practice.Chapter 3 analyzes the potential of lagged-advantages >. consumption-demand -. and investment-demand to economical increase in the process of exploiting the west, meanwhile the quantitative method is used in order to discuss how to make the best of the strategy of exploitation of west region to enlarge domestic demand in following context.Chapter 4 put forward some suggestions against the problems mentioned above on thebasis of recognizing comparative advantages in west part. The suggestions include: (1) reinforce the policy support for exploitation of west region; (2) reinforce the structural adjustment, and speed up the industrial upgrading; (3) increase the economy cooperation between east and west, and realize their linked development. (4) speed up the citilization of west region, and keep up with the pace of development.