The Impact Of Income Inequality On Consumption Demand In China

With the reformation and opening-up, China’s economy always keeps high growth rate. Chinese total income and average income lever becomes higher, and the quality of life turns better, meanwhile the distribution of income gets more and more unfair at the process of economic development and evolution. Since90years in20th, Chinese consumption expenses declines obviously, and the consumption rate is low for a long time, with the average consumption tendency dropping constantly. In order to stimulate domestic consumption, the government uses many strategies to expand domestic demand, but the effect is not obvious. So the relation between expatiation of income distribution and demand of consumption is an important topic, full of theoretical and realistic significance.On the basis of theoretic economy and relative data, this paper researches how the unfair distribution of income influences consumption demand and tries to find the relationship between them. Under the rapid economic development and improvement of economic institution in China, what’s the current status of the distribution of income and consumption demand, as well as the relation on earth? What index should use to measure the income gap? How deep can they influence each other? How can we adjust the gap of income distribution and consumption demand to effectively promote the development of economy? All the questions above are what to research and solve in this paper. In the view of data and analysis, the mayor conclusions are as follows:The correlation between unfair income distribution and consumption demand in China is negative, and that is when the gap of income distribution increases, the consumption demand decreases. That gap between urban and rural Chinese citizens is especially obvious, and restricts the growth of consumption demand. The residents’ average consumption tendency and marginal consumption tendency in high-lever income is lower than residents’in middle and low-lever income, especially the marginal consumption tendency in middle-lever income is biggest.After all, the paper can be divided into six parts in details:The first part is the introduction of the paper. The author mainly makes an introduction of the background of problem raise, the questions and significance, also the literature review of relevant study of inside and outside. Then we introduce purpose and approaches of the paper, and we also talks about the design of the paper.The second part provides the transference theory. It’s mainly to explain the basic theoretic principles of income distribution and relative policy, and the current state and some reasons of consumption demand.The third part mainly theoretically analyses the impact of the unfair income distribution on the consumption demand in China. It introduces some theories about them, and proves that income distribution influences consumption by consumption tendency, then analyses the effects about income distribution on consumption demand、consumption demand and consumption increase at last.The forth part majorly use models to empirically research the impact of the unfair income distribution on the consumption demand in China. It mainly analyses from the rural and urban citizens, as well as people in high-lever and low or middle-lever. At last make the important conclusions.The fifth part principally gives some suggestions and proposals to narrow the income gap. It is mainly from four aspects to explain, that is about rural and urban citizens、different area、 different careers and citizens in different lever income.The sixth part mainly summarizes the total conclusions in this paper and leaves some prospection in this paper, including the limitation and shortage of this research, and remains some questions to get further research.