A Study On The Harmonious Relationship Between Family Consumption And Family Finance Of Chinese Urban Families

The Harmonious Relationship Between Chinese Urban Residents'Family Consumption and Family Finance means a relationship that an appropriate family consumption decision-making can promote the development of family finance, and an appropriate family finance decision-making can promote the level of family consumption, what also can be called a mutual-promotion affection between family consumption and family finance.The study of this paper has two purposes. one is to answer the question that how to distribute the income and wealth on family consumption and family finance. The other one is to explore what is the best rational arrangement of family financial assets.The study of this paper has three functions. Firstly, the study can tell the family how to consume and how to invest in family financial assets, which can lead to the family's best choice to smooth the life-cycle's consumption and achieve utility Maximum. Secondly, to stimulate families more active in investing in the financial market would lead to the acceleration of financial market's development. Thirdly, more family financial investment lead to more family consumption because of the interest for financial market, more family consumption would lead to the acceleration of Chinese economic development.This paper contains 5 chapters:Chapter 1 is Introduction. The study begins at a background that Chinese families become more and more rich, their saving and financial asset also become more and more, and so they have a stronger and stronger requirement of family financing. The paper defined the terms this paper will referred to, like Family, Family Consumption, Family Finance, Family's Life-cycle,the Harmonious Relationship between Family Consumption and Family Finance.The purpose of the study is to help family to rationally deal with their consumption and financing.Chapter 2 is the Review of Relational Theories and Literature Summarize. The consumptive theories contain Marxian consumptive theories, classical times consumptive theories, neo- classical times consumptive theories, and the modern times consumptive theories. The financial theories contain the choice of financial asset theory, life-cycle theory, financial participation theory, and limit-participation mystery theory. The literature about the subject of this paper is very few, either foreign or domestic, many literate study on Chinese residents'consumptive actions, also many literate study on Chinese residents'financing actions, but few people study both on consumption and finance, so this paper is a new.Chapter 3 is the Actuality Analysis of the Harmonious Relationship Between Chinese Urban Residents'Family Consumption and Family Finance, Compared with that of America. The ratio of Chinese Urban Residents'Family Consumption to Family Income is 70.50%,10 percent lower than America, and the ratio of Chinese Urban Residents'Family Financial Asset to Family wealth is 34.90%, a little higher than America. But according to the configuration of Chinese Urban Residents'Family Financial Asset, the ratio of cash plus bank deposit is nearly 80%, which is too high, compare to that of bonds, stocks, and funds is too low, the important is that, Chinese Urban Residents'Family invest too few on insurance and retirement, which is not so good to the Harmonious Relationship Between Chinese Urban Residents'Family Consumption and Family Finance.Chapter 4 is the Theoretical Analysis of How to Achieve the Harmonious Relationship between. This paper elicit the quantitative relation between Family Consumption and Family Finance according to conventional consumptive theory of consumption and saving, analyzed how family consumption effect family finance, and how family finance effect family consumption. Then subsect life-cycle into five subsection, bachelorism days, family formation days, family grow-up days, family maturating days, and retirement days, also divide the families into low-income families, moderate-income families, and high-income families. Then analyzed families of different income level how to smooth their consumption and distribute their financial asset in different days of the life cycle.Chapter 5 is the Conclusion. This chapter gives some suggetions to the government, the financial departments, and the families to improve the Actuality Analysis of the Harmonious Relationship Between Chinese Urban Residents' Family Consumption and Family Finance, and promote the development of the financial industy, finally improve the economic development of our country.This paper gives some advice to promote the status in quo of Chinese family consumption and family finance. Firstly, the government should perfect the insurance system of our country, and enhance supervisement on the financial market, and expand more microeconomic surveys on family consumption and family finance. Secondly, the financial organizations should innovate more financial products, and give the investors more education on financial knowledge. Thirdly, the family members should change their mind on consumption and family finance to use more financial in their economic life, and try to participate some kind of risk investment, and learn more to rationally arrange their consumption and family finance.