DrivenbyfiscalpolicyonconsumptiongrowthSuggestions

1、Driven by fiscal policy on consumptiongrowth SuggestionsAbstract: This article is too low from the start of China s annual consumption rate to explain the three reasons for this phenomenon: economic growth, income growth and lack of coordination, the income gap is too large and the national policy i

2、s imperfect, which leads to the use of fiscal policy boost consumption growth requires tax cuts, transfer payments, a tax reform, optimize the fiscal expenditure structure and support the three ruralrder toinaochieve the same timeto take timely fiscal policies, China srapid economic development.Keyw

3、ords: fiscal policy, consumption rate, the marginal propensity to consume, disposable incomeIntroduction: Today sChina is a world -class developing country since the reform and opening up, our economy has achieved rapid development of the GDP in 1977 from 10.7% achieved rapid growth began in 2007, a

4、chieved 14.16% The rapid growth despite the global financial crisis in 2008, dropped to 9.63%, 9.11% in 2009, but its growth rate is still farexceeds the pace of development of some developed countries Economic growth is usually measured by GDP, while consumption and Investment has formed a core par

5、t of GDPtotal investment demandis the least stable part of the totaldemand of consumption is the most direct effect of factors, but with the important part, consumption and investment but has a distinct trend according to the National Bureau ofStatistics, China s final consumption rate since 2002 hb

6、aesena downward trend: 59.6% in 2002, dropped to 56.8% in 2003,54.3% in 2004, was 51.8% in 2005, 2006 was reduced to 49.9% in 2007 to 49% in 2008 was 48.6% in 2009 47.7%, in sharp contrast with this investment is steadily rising: 2002 was 37.9% in 2003 to 41% in 2004 43.2%, followed by three years,

7、has been hovering between 42% -43%, to 2008 reached 43.5% in 2009, it rose to 48%. Thus, consumption and investment is extremely uneven. Consumption and investment relations within the structure of demand, in this structure, consumption, investment and net exports between the three must maintain a c

8、ertain amount of relationship if the investment rate is too high, the scale of investment over the economic surplus capacity to produce a large supply of products demand in the market, the investment demand growth will eventually lose9the support of this difficult to sustain economic development, th

9、erefore, to implement the proactive fiscal policy, the development of effective domestic demand, consumption and investment to achieve a balance of great significance .First, inadequate consumption of a few reasons (an actual household income growth and economic growth disharmony. People sactual inc

10、ome growth and economic growth disharmony, seriously affected the relationship between the proportion of GDP expenditure structure, which restricts the level of consumption to improve, according to Keynes s absolute income theory shows that the growth rate of consumption and income, if they slow the

11、 growth rate will lead to the relative lack of consumer demand, while the last three decades, China s wages in addition to organs and units,teachers and other causes units, a decline in varying degrees, so the real income of our population growth rate is lower than the long-term economic growth, lea

12、ding to final consumption expenditure as a proportion of GDP declining by more than 60 years dropped to 80% of 90 60% or less, and now, only about 50% from National Bureau of Statistics shows that in recent years, China s economicogwrth rate remained at 10%, whileChina sincome growth of only 8.5% in

13、 , well below therevenue growth.long-termincomegrowth lower thantheeconomic growth,domesticdemandwillinevitably leadtolower productionsupply,resultinginthe imbalanceofeconomic development,and ultimatelyseriously affecteconomic development.(B disparity of income distribution gap, whether it is within

14、 the urban residents, or between urban and rural residents, the income gap has continued to expand. With the rapid economic development, the industry, the income gap between the various groups to become is growing, according to Du Senbei srelative income theory of consumption is determined relative

15、to the other person s income level and relative to my income level of the highest in history, that the income gap will lead to enhanced consumer demonstration effect, the average propensity to consume in the relative income varies according to the part of the rise, but when society as a whole unfair

16、 distribution of income, the income gap is too large, the average propensity to consume will affect the relative income changes in failing to change the part, so that the average propensity to consume and marginalpropensity to consume reduced, thereby reducing the consumption of size or slow growth

17、in consumption, according to the relevant academic statistics, China sGini coefficient in 1978 to 0.317, while in 2000, has reached the warning level of 0.4, China Social Science hospital report, in 2006 the Gini coefficient has reached 0.496, far more than the relatively reasonable range 0.3-0.4, a

18、ccording to World Bank estimates, the Gini coefficient in Europe and Japan but also in between 0.24-0.36. From this we can push our income gap over the poor, seriously affected China sco nsumption increase. Links to free download(Three national policy imperfections. As the economy continues to devel

19、op, prices are rising, especially housing, health care, education, pension and other aspects of daily life with the residents. Hard to buy a house , difficultother issues graduallybecomingprominent,while China spolicyadjustment lagproblemsalso ledto thecurrentsolutionis not well inthe actualhousehol

20、dincomegrowthrate of economic growth can not keep up with the case, onecan only be used to store most of the revenues futureconsumption, only a small part of the current period for theconsumer.Second, improve the consumption level of fiscal policy proposals (one for tax cuts, transfer payments and o

21、ther means to increase the disposable income of low-income consumers, the Government in order to improve the overall level of consumption, through tax cuts, transfer payments and other policies, according to the relevant scholars, our low-income consumers, the average propensity to consume and margi

22、nal propensity to consume is higher than high-income consumers, which means increase in disposable income of low-income consumers to improve the overall consumption level of intensity much larger than the increase in disposable income of all consumers, the impact strength. Therefore, in implementing

23、 the proactive fiscal policy in the process, should focus on the use of tax cuts, transfer payments and other measures to improve low- income consumers disposable income. For example, can increase personal income tax, while ensuring a minimum wage policy, subsistence allowances for urban residents a

24、nd other related systems implementation, in order to improve low-income consumers disposable income.(B actively promote the reform ofthetax system,strengthen the regulationof personal incometax effect,optimizethe structure ofincome distributiontonarrow theincomegap in moderneconomic society,thestate

25、 is tocontrol the main income redistribution, while the tax is to redistribute income countries the primary means, but China has not yet formed a complete system of tax regulation, the regulation of tax on the income redistribution effect is very limited, such as our country has not levy inheritance

26、 tax, gift tax and property tax and other specifications can be used with personal income tax, consumption tax, these related taxes complement each other to regulate the redistribution of income taxes, while the Western countries has been playing a regulatory function of each of these taxes. OECD (O

27、rganization for Economic Cooperation and Development countries, the tax structure, 60% have incomes regulatory function, and China sratio is only about 10%, much lower than in Western countries. Friedman spermanent income theory, consumers can control their entire income and expected to be achieved

28、and the angle of arrangement of current consumption, so and structure of income distributions ability and choice andpolicies directly affect the consumer only have a relatively balanced income distribution structure and the middle, two small income level, this community will have a relatively suffic

29、ient consumer demand.(C optimize the structure of government spending, protect and improve people s livelihood, improving peopl e s marginal propensity to consume health care, housing, education, pension and other issues continue to highlight the increased uncertainty of future spending, thus affect

30、ing the level of consumption as an important reason one with the continuous restruct uring of China seconomy, originally from the state of affordable housing, medical care and gradually return to private hands, the individual uncertainty of future consumption increased rapidly at the same time, Chin

31、a s public spending for social spending as a percentage the proportion of the national fiscal expenditure has been at a low level, far below the international average of 40% level in the national population increase future spending public consumption spending less off than the case, the residents on

32、ly reduce current consumption, the save up a lot of income to cope with the uncertainty of future expenses, sothe government should optimize the structure of financial expenditure, increase in public consumption expenditure ratio to improve people slivelihood as the goal, to eliminate people sconcer

33、ns, higher marginal propensity to consume to improve our level of consumption.(D expansion of public finance coverage in rural areas, increase support for the three rural in effvoertlys to effectiimprove rural residentsincome and consumption levels ofthe reform and opening up, China sheavy industry,

34、 light industry and so has made great progress, but our is still a large agricultural country, China sagricultural population is still about 7 0%, so to enhance the rural population s disposableincome, raising the level of China s consumption will be veryimportant there, the study said China s curre

35、nt consumptionof rural residents income there is a close link between, current income increases, consumption increases significantly, increase the income of rural residents consumption level of rural residents to increase the effect is very significant, especially the increase in the current period

36、and therefore, China implement a proactive fiscal policy, should increase the three rural support efforts by increasing the consumptionlevel of rural residents to boost the national consumption level, for example, the government can strengthen rural infrastructure construction, increase agricultural

37、 price controls and subsidies, to improve rural education and other ways to achieve greater income rural residents the purpose. Links to free downloadThird, China s current fiscal policy in December 2010 10to 12-day Central Economic Work Conference that China s 2011 economic growth will accelerate the transformation of the main line, to implement the proactive fiscal policy in order to strengthen the tax on income regulation of distributi