Impact Of Fiscal Expenditure On Rural Consumption And Spatial Effect

The insufficient consumer demand, especially the rural residents'consumption demand, has become the tightest bottleneck to restrict the further economic growth, since China has shifted from an economy driven by exports, investment and heavy industry to one driven more by consumption and services. Central and local governments have delivered a range of fiscal policies to promote consumption willingness, but the results are not good as expected. There is serious unbalance in Chinese consumption market for a long time, including the vast rural groups with very low demand consumption, and the weak consumption demand supported by huge fiscal expenditure, which show that we have not yet found the right coordination to boost the consumption of peasants. How to raise rural consumption level? How to maximize the stimulating effects of the public spending? Those have become big realistic problems existing in China's economic transition.Rural public spending is divided into fiscal spending for agriculture and fiscal transfer expenditure. This paper attempts to illustrate the influence mechanism of fiscal spending on the rural residents'consumption in combination with the actual situations of the villages through five phases:income effect, consumer confidence, consumption environment, substitution effect, speculative action. Based on systematic analysis of the present situation of Chinese fiscal spending and rural inhabitants'consumption, this paper adopts global spatial autocorrelation analysis, local spatial autocorrelation analysis, hotspots analysis to explore the spatial correlation between rural government spending and the rural inhabitants'consumption. Finally, this paper tries to verify the hypothesis and evaluate the role of public spending on the rural residents'consumption.The results show that:(1)The effect of endlessly expanding fiscal expenditure on the consumption of rural residents is not significant, and the proportion of investment toward countryside in contrast to city is low, which have a tendency towards construction rather than livelihoods. (2) The regional differences of rural public spending and rural residents'consumption are expanding regardless of the spatial correlation. (3) From 1995 year to 2014 year, the spatial correlation of Chinese fiscal spending for agriculture is becoming more remarkable, which shows a stable decreasing trend from north to south. The fiscal transfer expenditure and rural inhabitants' consumption all show a significant positive spatial correlation and a stable increasing trend on the whole from west to east. (4) The financial spending on agriculture has different effect on the rural residents' consumption of different regions, which has an inapparent inhibitive effect in central and western regions, a prominent galvanizing impact in eastern region. The rural fiscal transfer expenditure, the rural per capita net income both have promoted the rural residents'consumption everywhere, especially rural per capita net income is the most critical influences on the rural residents' consumption.