Analysis Of China’s Consumption Function And Consumption Situation

As known as investment, exports and consumption is the "troika" of economic growth in China. However, over the years, the pace of "Troika" is inconsistent and the final consumption is low in the rate of long-term, in addition, the final consumption demand of domestic residents is growing at the slow and economic growth is over-reliance on export and investment, has been the development of China’s economic problems to be solved. At the same time, the lack of consumer demand will produce a series of adverse effects on the macro-economic performance. In order to study the actual consumption expenditure situations of Chinese people, it is necessary to reclassify China’s consumption subject, and ultimately determine the consumption function model which is suitable for China’s overall consumption characteristics. But as for the overall consumption function, it is greatly influenced by various aspects of the macro factors. Therefore, the principal component analysis method will quantify two national macroeconomic regulation and control tools, that is, monetary policy and fiscal policy, so as to research the role of national policies to our nation residents’ consumption situation. The empirical analysis shows that the non-tight monetary policy and non-tight fiscal policy play a driving role to our residents’ consumption expenditure.