Research On The Government Infrastructure Investment Impacting On The Resident Consumption In China

According to the data released by the World Bank,up to 2013,the proportion of Chinese residents’ consumption of GDP has dropped from 62% to 49.6%. This proportion is not only lower than the OECD countries,and even lower than the Japanese and Korean culture similar to our country. Especially in recent years,the increasing pressure of foreign trade,increasing trade friction. "Three carriages" in the role of promoting the consumption of residents gradually weakened. However,in recent years,although the world economic recovery situation basically established,but China’s domestic demand for the national economy is still inadequate,the increase in income is not effective to improve the level of consumption of residents in China. Therefore,how to improve the consumption of Chinese residents is the "new normal" must face and solve the important problems. The government wants to expand domestic demand,must continue to adjust the economy through the fiscal policy of the camera,to adjust the economy through the appropriate fiscal policy,it is necessary to understand the main factors affecting the consumption of residents.This paper selects the 1995-2013 in China in 28 provinces panel data as samples for analysis,firstly,the panel data of two-way fixed effect model to study the influence of residents’ consumption of China’s infrastructure investment. The results show that: China’s government infrastructure investment for each additional 1%,so residents consumption accounted for the proportion of GDP will decline 0.31%. Secondly,by constructing the dynamic GMM model to estimate,it also proves the conclusion. At the end of this paper,through structural regression model to investment in infrastructure affects household consumption in the proportion of two indirect effect mechanism of inspection,test and control by the SUR model and 3SLS. The empirical results show that:(1) infrastructure investment will lead to the increase of the second industrial expansion of the scale,the size of the secondary industry will expand lead to a reduction in labor income,thus inhibiting the consumption;(2) more infrastructure investment will increase the rate of the second industry profit,while reducing the share of labor income and reduce the consumption of the residents.Through the study found that China’s infrastructure investment growth will reduce household consumption,but in empirical research also found private investment on the consumption of less negative impact,so this paper suggests that the government should be appropriate to change the traditional spending pattern,construction of harmonious inter governmental fiscal system.