CHEN Yan-bin, CHEN Jun
Journal of Renmin University of China.
2009, (6):
80-86.
Insufficient domestic demand,mainly caused by low household consumption demand,has generated economic imbalance and hindered the sustainable development in China.Furthermore,the main cause of the low consumption demand is that per capita wealth is below the desirable amount as well as the improper wealth distribution.On one hand,the low per capita wealth will reduce the consumption through both direct and indirect channels;on the other hand,the interaction between inequality of wealth distribution and insufficient consumption leads to a vicious circle.As a result,it is difficult for the consumption demand to increase.In addition,the huge gap between the urban and rural development generates the structural inflation and hence the decrease of the wealth of the rural residents,bringing the total consumption demand down.Therefore,only through raising household wealth level and improving the wealth distribution can China promote the domestic demand.