The Income Gap Between The Demand For Consumer Impact Studies

From the year 1990 on,there are two striking characteristics in China economic development: One is that the national economy has maintained a sustained,rapid and sound development, another is that the gap of income distribution is widening. The main reason that the national economy has maintained rapid development is that Chinese government has incessantly invested in fixed assets. Meanwhile, the proportion of the people's consumption demand in the gross domestic products has gradually decreased.This thesis' first two parts introduce Chinese people's consumption status and sorts of income distribution differences. By the people's consumption expenditure, the consumption ratio is lower than that of either its post years or other nations,and continue to decline. The rural areas people's consumption ratio is much lower. Because urban resident's consumption structure will upgrade and rural resident's consumption potential is still great,the consumption growth depend on more increase of people's income.By the people's income, the gap of income between different cities and towns,between different rural areas and between the urban and rural areas,has widened. Therefore, the Gini coefficient ,between different cities and towns,between different rural areas and between the urban and rural areas,become big, and that the rate of income per capita between urban and rural areas has increased. We can conclude that, between the income gap and consumption demand, there should have some relation, which income gap's widening restrains the increase of marginal propensity to consume and decreases the growth of consumption demand.The theoretical analysis and empirical research of the impact of income distribution on consumption demand proves that, in recent years, the income distribution gap and average propensity to consume is negative relation, and that the income gap's widening is the reason of the decrease of marginal propensity to consume and the growth of consumption demand. According to above mentioned, government should take some measures to narrow the income gap: First, fully exert influences on income redistribution and offer much more transfer payments. Second,establish nationwide unified labor market , accelerate transfer rural labor into non-agricultural economy. Third, implement active employment policy and do everything possible to create more jobs. Finally, speed up urbanization, narrow the gap of income between urban and rural residents.