China Will Expand Domestic Demand And Consume &Nbsp; It Needs To Overcome Four Difficulties.

The current global financial crisis is not yet in effect, the impact is still on. Under the new situation, China's economy relies on investment and export driven space and strength is limited, we need to enhance the driving force of the consumption cart to make up for the weakening of investment and export pull.

But from the perspective of consumption growth, the potential and space are huge. It is not easy to fully release the consumption power and increase the driving force of consumption. We need to create conditions and create an atmosphere to fully exert the force of consumption.

To sum up, the acceleration of consumption still needs to overcome several difficulties.

First, the low income gap and low income expectation remain an important impediment to further expansion of consumption.

The increase or decrease of income determines the scale and level of consumption. According to the data of the per capita real income level and per capita consumption expenditure of urban and rural residents in recent years, the per capita disposable income of urban residents increases by 1%, which can drive the per capita consumption expenditure of urban residents to increase by 0.85%. The per capita net income of farmers increases by 1%, which can drive the per capita consumption expenditure of farmers to increase by 0.74%.

According to statistics, in recent years, the income gap has a greater impact on Residents' consumption expenditure. Under normal circumstances, the consumption tendency of low-income residents is higher than that of high-income residents, and the consumption tendency of rural residents is higher than that of urban residents.

According to statistics, in 2008, the consumption tendencies of residents (the ratio of consumption expenditure to disposable income) of the 10% lowest income group of urban residents in China was 0.96, while the highest 10% income group was 0.63, while the rural residents were 0.78 and the urban residents were 0.73.

The highest 20% income group accounted for 8.3 times the income of the lowest 20% income group.

In addition, the income gap between urban and rural residents in China is relatively large. The per capita disposable income of urban residents is equivalent to that of rural residents per capita net income from 2.2 times in 1990 to 3.3 times that of 2008. The consumption structure of urban and rural residents is two yuan, which is very obvious. Under the same consumption environment and conditions, because of low income, especially because of poor stability of income sources, permanent income is difficult to guarantee, and the consumption ability of low-income groups will be greatly restricted.

The large income gap between different sectors and between urban and rural residents has become one of the important factors to curb consumption expenditure.

In the first quarter of 2010, China's economy continued to recover steadily. However, many enterprises still did not improve significantly. The phenomenon of staff reduction and wage reduction occurred frequently, and the growth of residents' income was expected to decrease.

It is also hard to predict when the global financial crisis will disappear completely.

Poor income prospects will cause some residents to have frugal consumption behavior, which will directly lead to the reduction of new consumption expenditure, which is not conducive to the expansion of consumer demand.

This is a new year to promote consumption. First of all, we need to consider how to make the wallet of the residents rich, that is, to solve the problem that the vast majority of the residents can afford to spend money.

Second, the expected difference between the stock market affects consumer confidence and enthusiasm.

Consumers' judgment of economic prospects, income expectations, price levels and future expenditures is an important factor affecting consumer confidence.

At present, the stock market with wealth effect has been depressed due to the impact of interest rate increase, the withdrawal of loose money and fiscal policy, and so on. It is not optimistic that residents' property income will shrink, to some extent, it will inhibit investors' enthusiasm for consumption and will have a certain dropout effect on the overall consumption growth.

Our residents will increase household consumption by about 1 to 1.5 yuan.