An Empirical Analysis of Urban Residents' Consumption in China

Since the outbreak of financial crisis,the Chinese government upholds the policy of expanding domestic demand to promote economic growth effectively.The key,however,is whether residents' consumption demand can keep its sustainable growth.Through building the consumption hypothesis and model,the author analyzes the relationship between consumption and income of Chinese urban residents based on consumption function,and concludes that now the urban residents' consumption behavior conforms to permanent income hypothesis,i.e.their consumption behavior is not determined by current revenue but by controllable and anticipated total revenue.The government should fulfill the following works to promote sustainable growth of residents' consumption,viz.,increasing urban residents' income to improve actual consumption,guaranteeing livelihood and social programs to build a stable social environment for urban residents' consumption,and actively expanding consumption credit system to advance the urban residents' consumption.