The Role of Income Structure Improvement in Helping Broaden the Rural Consumer Market

Too large urban-rural gap and weak rural consumption is the most significant problem in rural areas, and also an insurmountable barrier to the process of China's economic development. At the same time, the modernization of agriculture is proposed as the major policy for China to actively solve issues concerning agriculture, countryside and farmers. Using panel data model and taking into account the regional characteristics and time effects of the sample data, we conduct analysis of the farmers' income structure in the five provinces and one city of East China at the upper reaches of economy, and estimate the effects of farmers' income on farmers' consumer spending, in order to find the main channel for improving farmers' consumption. This paper emphasizes the great significance of farmers' consumption improvement to China's economic restructuring and solving the future economic development in the context of current financial crisis.