| Because of the reform and opening in1978and the implement of socialistmarket economic system, China’s economy grows rapidly. The material and spirituallife of residents has become increasingly rich. People’s living standards and quality oflife continues to improve. However, due to some historical and institutional reasons,the urban and rural economic development in China is extremely uneven. Ourcountry’s urban and rural income gap is widening. Our urban-rural income gap hasreached the world average of about two times. China has become one of the largestcountries in the world on the income gap between urban and rural areas.Consumption, investment and net exports are driving economic growth Troika.For a long time in our country’s economy is driven by investment and export growrapidly. Domestic demand has been lack of motivation for a long time. Residents’consumption rate, especially rural residents’ consumption rate is on the decline. Theinternational financial crisis brings the change of the international economicenvironment. Some countries have to reduce imports of Chinese goods. Meanwhilethe saturated urban infrastructure also limits the government’s investment.Consumption growth is the fundamental driving force of China’s economic growth.Stimulating the potential consumer of the residents is the permanent solution of stableeconomic development.Residents’ consumption growth lags behind economic growth in China.Urban-rural income gap is so large. It has a certain traditional culture, historical andinstitutional reasons. This paper analyzes the reason of low rate of China’s consumption and the big gap of income, then start with the income gap betweenurban and rural areas to establish the regression model. So that to research theconsumption of urban and rural residents in our country. Then come to the conclusionthat the income gap between urban and rural areas inhibit consumption growth.Finally, put forward the appropriate policy recommendations for narrowing theincome gap between urban and increasing consumption.This paper is divided into five parts. The first chapter is an introductionincluding the background of selecting this topic, the significance of selecting thistopic and literature review at home and abroad on this topic, etc. The second chapteranalyzes the residents’ consumption in China. Objectively describes the residents’consumption status quo of our country, and analyzes the reason of the lowconsumption of residents in our country. The third chapter analyzes the reason oflarge urban-rural income gap, describes the changes and development status of theincome gap between urban and rural residents, analyze the causes of the large incomegap between urban and rural residents of our country, and briefly discusses pathwaysof the income gap between urban influences on consumption. The fourth chaptermainly using data from1993to2013to establish model for empirical analysis,introducing economic growth and real wealth this two control variables to study theeffect of urban and rural income gap on consumption. The regression results showthat the expansion of urban-rural income gap has obvious inhibitory effect onconsumption growth. It is consistent with the reality and theoretical analysis. At thesame time, economic growth has significant positive effect on residents’ consumptiongrowth and to a certain extent real wealth increasing will also promote the growth ofconsumption. The fifth chapter on the basis of reality description, theoretical analysisand empirical test，put forward some policy suggestions to narrow the income gapbetween urban and rural areas, so that to promote the residents’ consumption,especially the rural residents’ consumption. Through the empirical test results in this paper, this paper argues that under thecurrent situation of the excessive income gap between urban and rural areas in ourcountry, narrowing the income gap between urban and rural areas to stimulate ruralconsumption potential is the potential way to promote the of the residents’consumption in China. |
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