Disscuss Consumption Conditions And Its Impact On Consumption

Consumption is not the power but also the purpose of production. As the starting point of production process, it takes the most important role in pulling GDP. Experience has shown that, as long as consumption growth slows down, the rate of economic growth is bound to decline. Facing the declining trend of China’s household consumption rate, we must firmly grasp the strategic basis for expanding domestic demand, establish a long-term mechanism to expand consumer demand, thereby releasing the potential of consumption and expanding domestic market size to maintain steady development.In this paper, we take Zhejiang’s resident consumption as the research object. First of all, we analyze the current situation of consumption in Zhejiang Province overall from consumption level, consumption structure and evolution trend. Also we discuss the constraining reason. Reviewing the research results at home and abroad, we discuss the connotation of consumption conditions and make a consumption function on the basis of the factors that affect consumer decision-making mechanism of expansion and combine the actual situation of Zhejiang Province. Then we use the panel data of Zhejiang from2004to2011to make an empirical analysis. Studies shows the proportion of underage population and elderly population, the mobile phone penetration rate and the level of the consumer credit have a greater significance in prompting consumption except the per capita disposable income. And the level of social security, economic structure and labor mobility showed a great although not statistically significant, but the t-statistic are rather large, indicating their impact on consumer spending is relatively large and are positively promoting consumer spending. Differ from previous scholars’ findings, urbanization does not reflect significantly in prompting consumption in this article, we make corresponding explanations to it. Based on the regression results, we also calculated the conditions index of11cities in Zhejiang and find the index is according with the level of consumption. We also put forward the direction of improving consumption.Finally, we put forward the policy suggestions from cultivating consumption hotspots and improve the consumption environment according to the situation of consumption in Zhejiang Province and the future development trend. This paper argues that the province should focus on the following consumption hotspots:culture, tourism, information, car and the old hot consumer spending. And also point out the problems we should be noticed in the process of improving the social security, reducing differences in income distribution, improving consumer credit and increasing the urbanization.