I. The increase in total consumption and economic income increase basically synchronized
From the consumption level of China's rural residents, the total amount of income and consumption of farmers and the incremental level of change in the relationship between the average propensity to consume, Engel's coefficient, the gap between rural and urban consumption and the ratio of the agricultural population ratio and the proportion of rural consumption and so on, have shown that China's rural residents in the overall level of consumption is in the process of improvement.
(I) Increase in the total consumption of rural residents
According to statistics, since entering the 21st century, China's rural residents have seen their total population decrease year by year while their total level of consumption has increased year by year, from 1,566.6 billion yuan in 2001 to 2,690.64 billion yuan in 2008, an increase of 1,124 billion yuan over the seven years, or 165.58 billion yuan per year on average. In seven years, total consumption increased by 1,124.04 billion yuan, or an average of 165.58 billion yuan per year, a growth rate of 43.8 per cent. Rural residents' consumption is on an upward trend, both in terms of total volume and rate of growth. Compared with the growth in the consumption of the entire population, the level of per capita consumption has increased, even though its share of the total consumption of the entire population has declined and its rate of growth has lagged behind. If all 230 million rural residents who have moved to the cities consume in the countryside, there should be a total consumption of 857.90 billion yuan, calculated on the basis of a per capita consumption of 3,730 yuan by rural residents in 2008, or 155.469 billion yuan, calculated on the basis of half of the per capita consumption of urban residents. Therefore, in grasping the total volume and level of consumption of China's rural residents and analysing the realities of expanding domestic demand in the countryside, it is important to take into account the rapid transfer of rural residents brought about by China's industrialization and urbanization. In particular, we must take into account the dramatic changes brought about by the central government's strategic plan to form a new pattern of economic integration between urban and rural areas, as well as the positive effects of China's efforts to break up the urban-rural dual structure.
(2) Consumption and Income Growth Basically Synchronized
Since the reform and opening up, China's rural residents have seen their incomes increase rapidly, and their consumption levels have also risen, with the per capita net income of rural residents increasing from 191 yuan in 1980 to 2,366 yuan in 2001, and reaching 4,761 yuan in 2008, an increase of 470.6 percent compared with 1980, and an average annual increase of 6.4 percent. In 1980, the per capita consumption of rural residents was 162 yuan; in 2001, it rose to 1,741 yuan, and in 2008, it reached 3,661 yuan, an increase of 383.5% compared with 1980, or an average annual increase of 5.8%. It can be seen that the living consumption level of rural residents is basically consistent with the growth rate of income, indicating that the willingness of rural residents to live and consume is still relatively obvious, and with the increase of income, it will keep the consumption level in the same direction to increase. With the advance of time, China's rural residents in that year's per capita net income and per capita real consumption expenditures are increasing, although the rate of increase is relatively slow, but the gap between the two in terms of quantity to maintain a relatively fixed ratio.
(3) The average propensity to consume of rural residents has been rising steadily
According to Keynes's theory of absolute income, there is a stable functional relationship between consumption expenditures and real income, and consumption expenditures mainly depend on people's current disposable income, and with the increase of income, the consumption will be increased, but the magnitude of the increase in consumption will be smaller than the magnitude of the increase in income.2001-2004 From 2001 to 2004, the average propensity to consume of rural residents in China was relatively stable, remaining at around 0.74, while in 2005-2006, the average propensity to consume showed an upward trend, rising from 0.74 to the highest values of 0.78 and 0.79. By 2007, the average propensity to consume of rural residents had increased to 0.78 and 0.79, respectively. In 2007, the average propensity to consume of rural residents declined, and in 2008 it continued to fall to 0.77. The upward and downward trends in propensity to consume can be explained, on the one hand, by the fact that with the increase in people's incomes, the courage to consume of the rural residents has been greatly boosted, and consumption has been constantly increasing. On the other hand, the change in the retail price index of commodities in China also has an impact on the consumption of rural residents. In general, since the "Tenth Five-Year Plan" period, the average consumption tendency of rural residents varies between 0.7 and 0.8.
(4) The Engel's coefficient of rural residents is declining amidst fluctuations
Since the Tenth Five-Year Plan, the Engel's coefficient of rural residents has been on a downward trend in general, and although it bounced back in 2004, it soon kept on declining again, and declined at a faster rate than that of the urban residents.
The Engel's coefficient of rural residents has decreased by 8.7% in the past 7 years. In seven years, the Engel's coefficient for rural residents decreased by 8.4%, while the Engel's coefficient for urban residents decreased by only 0.8% during the same period. The difference between the Engel coefficients of urban and rural residents has been narrowing year by year, indicating that the consumption levels and gaps between urban and rural areas are getting closer, and that there exists a great deal of convergence between urban and rural residents in terms of consumption demand and consumption direction. Although China's Engel's coefficient for rural residents rebounded in 2008, it should be considered that this was due to changes in the consumer price index, which rose by 6.5 per cent in 2008 over the previous year, the highest annual rate of increase since the Tenth Five-Year Plan (the total rural consumer price index rose by 23.4 per cent in the period 2001-2008, with the average rate of increase being 3.4 per cent), and the average rate of increase in the rural consumer price index was 3.5 per cent. (from 2001 to 2008, the total consumer price index for rural residents rose by 23.4%, with an average increase of 3.1%). In terms of the speed of change, the Engel's coefficient for rural residents changed by 4 percentage points over the 7-year period 2001-2008, exceeding the 0.3 percentage point change in the Engel's coefficient for urban residents over the same period. This indicates that the overall quality of life of rural residents has entered a stage of rapid improvement and is constantly moving closer to an affluent standard of living.
(E) Rural residents' consumption growth is lower than that of urban
The comparison of the absolute per capita consumption of urban and rural residents from 2001 to 2008 was always between 3.6 and 3.8, and the consumption level of urban residents in the same year was always higher than that of rural residents. Moreover, the consumption of urban residents has grown faster than that of rural residents, with an average annual growth rate of 7.7 per cent for urban residents from 2001 to 2008, compared with 5.3 per cent for rural residents. It should be recognized that the difference in consumption between urban and rural residents resulting from the dual structure of urban and rural areas is an inevitable phenomenon, and in particular the difference in absolute values of consumption resulting from the different income levels of urban and rural residents will continue to exist. It is only with the rise in the income level of rural residents and the emergence of a growth rate that exceeds that of urban residents that the contrast between urban and rural consumption levels is likely to change. This is because, as income levels rise, rural residents need to consume more and need to improve their quality of life, while urban residents' consumption enters a period of relative stability. At that time, the gap between urban and rural residents' consumption levels is likely to continue to narrow on the existing basis, or no longer expand.
Two, changes in the consumption structure and the improvement of the quality of life largely coincide
(1) the overall change in the consumption structure of rural residents, showing a decline in subsistence demand, while the trend of luxury consumption increases
1, food consumption expenditure. "Since the Tenth Five-Year Plan, the proportion of food consumption in the consumption expenditure of rural residents in China has tended to decline year by year, although it fluctuated a little near 2004; in 2001, the proportion of food consumption expenditure was 47.7%, and then dropped to 43.1% in 2007, and then rebounded to 43.7% in 2008, a drop of 4 percentage points. In 2008, it rose slightly to 43.7%, a decrease of 4 percentage points. According to statistical data analysis, the rise in the share of rural residents' food consumption expenditures is directly related to the rise in food consumption prices, which increased by 9.9% in 2004 and by 14.3% in 2008 (the cumulative increase in food consumption prices in rural areas in the period from 2001 to 2008 was 52.6%). At the same time, the internal structure of rural residents' food consumption expenditures has changed considerably, with per capita consumption of grains and vegetables decreasing, and consumption of poultry, meat, eggs, milk and their products fluctuating but generally showing an increasing trend. This shows that the quality and structure of the diet of China's rural residents continue to improve and improve.
2. Clothing consumption expenditure. "Since the Tenth Five-Year Plan, the proportion of clothing consumption in total consumption has risen from 5.67% in 2001 to 6% in 2007, with a slight decline to 5.8% in 2008, and although there was a slight fluctuation in 2004, it tended to be on an upward trend on the whole. The rising proportion of clothing consumption shows that, with the improvement of living standards, rural residents are paying more and more attention to the improvement of clothing. At the same time, it has a great relationship with the continuous decline in the consumer price of clothing for rural residents (the cumulative decline in the consumer price of clothing for rural residents from 2001 to 2008 was 13%).
3, housing consumption expenditure. Housing consumption occupies a relatively important position in China's rural consumption, with the proportion of rural housing consumption in total consumption rising from 16.03% in 2001 to 16.4% in 2002, then dropping to a low of 14.49% in 2005, and then recovering rapidly, to 17.80% in 2007, and then rising further to 18.5% in 2008. This rise was achieved in the context of a sustained increase in farmers' incomes and a steady rise in the prices of residential consumer goods (a cumulative increase of 31.6% in the prices of consumer goods for rural residents' housing from 2001 to 2008), thus reinforcing the strong and urgent demand of rural residents for improved housing. 32.4 square meters, an increase of 6.7 square meters, an increase of 26.1%.
4. Consumer spending on household equipment and services. As rural residents' incomes increase and consumption levels rise, a variety of durable consumer goods such as color TVs, refrigerators, washing machines and air conditioners have entered the homes of rural residents. Consumption of household equipment and goods as a proportion of total consumption fell from 4.4% in 2001 to 4.1% in 2005, then began to rise, reaching 4.6% in 2007 and 4.8% in 2008. Throughout the Tenth Five-Year Plan period, consumption of household equipment and goods was generally on a downward trend. This situation does not mean that rural households are saturated with household equipment, because consumption of household equipment in rural areas has been rising again since the Eleventh Five-Year Plan. This phenomenon is probably due to the fact that prices have risen more rapidly, which has led to a reduction in the purchasing power of the rural population, which spends more on food, and also due to the overburdening of medical care and so on. In short, the proportion of rural residents spending on household equipment supplies has risen rapidly in recent years, giving us reason to believe that there is great potential for the development of this market, because it is the inevitable modernization of life.
5, transportation and communication consumer spending. With the rapid development of transportation and communications, they are increasingly close to people's daily lives, and gradually become an indispensable part of people's lives. Income growth and the rapid development of transportation and communication have led to changes in the lifestyles of rural residents, resulting in a steady increase in their expenditures on transportation and communication. Throughout the first four years of the Tenth Five-Year Plan, the proportion of rural residents' consumption of transportation and communications in total consumption was fairly stable, remaining within the range of 5.6% to 6.0%. From the last year of the Tenth Five-Year Plan, the proportion of transportation and communication consumption rose rapidly, reaching 10.2% in 2007 and dropping slightly to 9.8% in 2008, during the Eleventh Five-Year Plan period.
6. Cultural, educational and recreational goods and services. With the increase of people's income, the arrival of knowledge-based economy and the change of ideological concepts, people's consumption expenditure on cultural and recreational goods and services has increased year by year. It increased from 6.3% in 2001 to 11.6% in 2005, and then decreased year by year to 10.8% in 2006, 9.5% in 2007 and 8.6% in 2008. The proportion of rural residents' consumption expenditure on recreation and culture to their living consumption expenditure rose steadily and then fell slowly. The main reason for this phenomenon is that as living standards improve, people pay more attention to the pursuit of spiritual civilization, and expenditures on recreation and entertainment continue to increase. At the same time, before the reform of compulsory education in 2006, the increasing cost of education led to a constant increase in the proportion of recreation and entertainment expenditures from 2001 to 2006, and with the reform of compulsory education in 2006, the cost of education for rural residents continued to decrease, resulting in a constant increase in the proportion of recreation and entertainment expenditures. Thus, the proportion of recreation and entertainment expenditures has been decreasing. On the other hand, it also shows that rural recreation, education and culture are still underdeveloped, and many rural villages do not have high-level, high-grade and popular recreation facilities and cultural activity stations, which leads to the fact that farmers are forced to reduce their spending on recreation and culture.
7. Health care. The physical quality of farmers is closely linked to their production capacity. As the living standard of rural residents improves, more and more people gradually have the ability to pay attention to their own physical and mental health, and thus rural residents' health care expenditures continue to increase. "Since the Tenth Five-Year Plan, rural residents' health care expenditures as a percentage of total expenditures have risen from 11.06% in 2001 and 11.5% in 2002 to 12.1% in 2003 and 11.3% in 2004, and then began to decline, to 6.6% in 2005, 6.8% in 2006, 6.5% in 2007, and 6.5% in 2008, and 6.5% in 2009, and 6.5% in 2010. 6.5% in 2007, and 6.7% in 2008.From 2001 to 2004, the proportion of rural residents' medical care in total consumption expenditure increased steadily, which indicates that rural residents' concern for their physical health has continued to grow.After 2004, rural medical consumption health care expenditure saw an increased decline and remained at 6.5%-6.8%, a phenomenon that occurred because of the The launching and promotion of the new rural cooperative medical care has greatly reduced the medical costs of rural residents, hence the decline in the proportion of health care consumption. Of course, it also includes the government's long-standing policy of low prices for rural health care and personal goods (the average annual increase in consumer prices for rural health care and personal goods was 0.8% in 2001-2008).
(2) Among the changes in the consumption structure in different regions, the quality of life in the eastern region has significantly improved, while in the central and western regions there has been some improvement
1. The total living consumption expenditure in all regions has been rising. Compared with the per capita consumption expenditures of different regions in the same period from 2005 to 2007, the order of high and low is as follows: the eastern region, the northeastern region, the central region and the western region. In terms of food expenditures, although the absolute amount of expenditures (in terms of current year's prices) has been increasing, the relative amount of expenditures, i.e., the proportion of food expenditures in the total expenditures, has been decreasing, which indicates that people's standard of living has been increasing, with the Eastern Region decreasing from 42.12% in 2005 to 40.56% in 2007, and the Central Region decreasing from 48.05% in 2005 to 44.84% in 2007. The eastern region decreased from 42.12% in 2005 to 40.56% in 2007, the central region decreased from 48.05% in 2005 to 44.84% in 2007, the western region decreased from 49.79% in 2005 to 46.62%, and the eastern region decreased from 39.48% in 2005 to 37.86% in 2007
2. In order of the quality of life, the northeastern region, the eastern region, the central region, and the western region are in the order of quality of life. region is very close to the affluent level, and the central and western regions as a whole are at the moderately well-off level and are constantly moving towards affluence. In terms of absolute quantities (at current year prices), clothing, housing, household equipment and goods, transportation and communication, cultural, educational and recreational goods, and medical care grew year by year from 2005 to 2007, but in terms of relative quantities, clothing, housing, household equipment and goods, and transportation and communication accounted for an increasing proportion of total consumption year by year, with housing spending always in second place, and rising more sharply, driving the upgrading of rural residents' consumption, and driving the upgrading of rural residents' consumption. The expenditure on housing has always been in the second place, and the increase is larger, which drives the consumption upgrade of rural residents, the expenditure on transportation and communication exceeds the expenditure on education and recreation in the third place, the expenditure on education and recreation is decreasing due to the reform of the compulsory education, which reduces the cost of education, and the expenditure on health care is uncertain due to the unpredictability of the people's birth, ageing, sickness, death, and so the expenditure on health care of the rural residents has fluctuated.
3. High-end consumer durables have increased in all regions. From the changes in durable consumption per 100 households, we can see the upgrading changes in the consumption structure of farmers in different regions. from 2005 to 2007, the number of washing machines, refrigerators, air-conditioners, range hoods, motorcycles, mobile telephones, color televisions, cameras, and home computers owned by each 100 households in each region has been increasing. Among them, the eastern region ranks first in the country in terms of all consumer durables per 100 people except washing machines, followed by the northeast region, which has more washing machines per 100 people than the eastern region, followed by the central and western regions. We can see that the consumption of bicycles and black-and-white televisions per 100 people has been decreasing, while the consumption of motorcycles and color televisions has been increasing, and the number of telephones per 100 people has been relatively stable, while the number of cell phones has been increasing rapidly. The changes in the components of rural residents' consumption in each region are consistent with the previous analysis of rural consumption in general, indicating that people's purchasing power has increased with rising incomes and the rapid development of social and cultural, transportation, and medical care, which has prompted a continuous change in their consumption patterns, an upgrading of their consumption, and an improvement in their quality of life.
(3) Differences in the consumption structure of different income groups
A descriptive analysis of the consumption structure and changes in the rural residents of different income groups reveals that the differences in income levels determine the differences in the consumption levels and the consumption structure.
1. Income levels are different, but consumption expenditures all show growth. According to the statistical data, the total consumption expenditure of different income groups of China's rural residents (at current year's prices) has been growing from 2000 to 2008. Among them, the consumption expenditure of low-income households increased from 977 yuan in 2000 to 2,145 yuan in 2008, an increase of 119.5 percent; that of lower-middle-income households increased from 1,233 yuan to 2,653 yuan, an increase of 115.2 percent; that of middle-income households increased from 1,501 yuan to 3,286 yuan, an increase of 118.9 percent; that of middle- and high-income households increased from 1,877 yuan to 4,191 yuan, an increase of 123.3 percent; and that of high-income households increased from 1,877 yuan to 4,191 yuan, an increase of 123.3 percent. 123.3%; and high income households increased from $3,086 to $6,854, an increase of 122.1%. The data show that the higher the income level, the higher the increase in consumer spending.
2. The growth of food expenditure is different. Food expenditure as a proportion of total consumer spending, from 2005 to 2007, the high-income group and lower middle-income group has been in a state of decline, low-income, middle-income and upper middle-income group is the first decline, and then slightly rebounded in 2007, this phenomenon is basically the same as the previous analysis, may be related to the rise in prices to a certain extent. Meanwhile, it can be seen that the proportion of food consumption in the total consumption of the high-income group is less than 0.4, and the whole group is at the affluent level, and the living standard is gradually improving, the proportion of food expenditure in the total expenditure of the middle and high-income group is approaching the affluent level, the middle-income group's standard of living is still at the well-off level although there is an improvement, and there is a certain gap with the affluent level, and the middle-income group is entering into a well-off level of life although its living standard is improving but it is still at the well-off level with the middle-income group. standard is improving, but compared with the middle income is still poor, the low-income group is always hovering on the edge of subsistence and well-off.
3. Consumption other than food expenditure is on the rise. In terms of absolute quantity (at current year's prices), the expenditures of different income groups on clothing, housing, household equipment and goods, transportation and communication, cultural, educational and recreational goods and medical care were all in a state of growth from 2005 to 2007, but in terms of relative quantity, the proportion of clothing, housing and household equipment and goods in the total consumption was in a state of rise year by year, with housing expenditures always in second place and rising by a larger margin, driving rural residents' consumption other than food up. The magnitude is larger, driving the consumption upgrading of rural residents. With the exception of the low-income group, the transportation and communication expenditures of all other income groups were on the rise, and surpassed the expenditures on culture, education and entertainment to rank third, while the expenditures on culture, education and entertainment of all income groups were on the decline from 2005 to 2007. This is due to the fact that the reform of compulsory education in rural areas has reduced the cost of education, so that the expenditure on education, culture and recreation has been decreasing. Due to the unpredictability of people's life, illness and death, the expenditure on health care is uncertain, so the expenditure on health care fluctuates in different income groups.
Three, differences in consumption behavior and demand tendency to smooth convergence
(a) differences in consumption behavior of farmers in different regions
China's four regions of eastern, central, western and northeastern division, on the one hand, is a geographical division, on the other hand, it can be seen that such a division and the level of income is closely related. According to the 2005-2008 data of the Statistical Yearbook, we can rank these four regions in order of income level, in order of the eastern region, northeastern region, central region, western region. High-income regions, i.e., the eastern and northeastern regions, as a whole, have their basic consumption met, so their propensity to consume is lower, while low-income regions, i.e., the western regions, are constrained by their income, and a large part of their income has to be used to meet the basic consumption expenditures of life, so their propensity to consume is higher. The consumption propensity of the farmers in the middle-income region, i.e., the central region, lies between the eastern, northeastern and western regions.
1. In the four years from 2005 to 2008, the higher the income level of rural residents, the lower their average propensity to consume; while the lower the income level of the region, the higher their average propensity to consume, indicating that the desire to consume is strong in low-income regions, while the propensity to save is strong in high-income regions.
2. In the four years from 2005 to 2008, as a whole, the average consumption in the eastern region is more stable; the average propensity to consume in the central region first rises and then declines, and the average propensity to consume in 2008 is lower than that of 2005; the average propensity to consume in the northeast and the west are both declining; the average propensity to consume in the northeast declines by a large margin. This indicates that the range of change in average propensity to consume is smaller in regions with higher incomes, and the differences in the consumption behavior of farm households are smaller.
3. From 2006 to 2008, the marginal propensity to consume of rural residents in different regions differed, among which, the marginal propensity to consume in the central region was the highest in 2006, while the marginal propensity to consume of farmers in the northeastern region was the lowest, and the eastern and western regions were in the middle. 2008, the marginal propensity to consume in the eastern region was the lowest, and it has been in the decline for three consecutive years, which indicates that rural residents in the eastern region have not been more active after the income level has increased. In 2008, the eastern region had the lowest marginal propensity to consume, and has been in decline for three consecutive years, indicating that rural residents in the eastern region did not increase their consumption expenditures more after their income level increased; the western region had the highest marginal propensity to consume, but it also declined for three consecutive years, mainly because of the lower income level and the lack of income growth. The part of the increase in income is used more for saving or for productive investment; the marginal propensity to consume in the central region has changed a lot, indicating that the rural residents in this part of the region fluctuate strongly in their desire to expand their consumption demand with the increase in income. The marginal propensity to consume of rural residents in the Northeast region is in an upward trend, objectively demanding increased consumption with increased income.
(2) Different consumption behaviors of farm households in different income groups
Based on the five categories of grouping of farm household incomes in the China Statistical Yearbook, we have collected and collated the consumption data of farm households in these different income groups.
1. From 2003 to 2008, the average propensity to consume of the five income groups decreases from low to high, and the average consumption of the low-income group is greater than 1, which indicates that the lower-income farmers are limited by their income, and all of their incomes are used for basic daily life consumption, and also need to borrow money or relief to satisfy the basic daily life because of the shortfall in their income, and they have a greater desire to consume, and therefore the average propensity to consume is even larger. The average propensity to consume is larger or even greater than 1. As income continues to rise, the basic consumption of farmers in the higher income brackets can be satisfied, and as income continues to rise, the propensity to consume continues to decrease while the propensity to save continues to increase.
2. From 2003 to 2008, the average propensity to consume of farm households in each income group has experienced the process of growth first, and then decline, which is consistent with our analysis of changes in the consumption structure of different income groups in the first part of the analysis of this phenomenon is due to the rise in prices and the inertia of consumption of farm households, which leads to the farm households in order to maintain their original propensity to consume to spend more money, and with the decline in prices, the average propensity to consume of farm households in each income group can meet the basic consumption, and with the increasing income, the propensity to save continues to increase. And with the decline in prices, the average propensity to consume of each income group also gradually declined.
3, according to Keynes's point of view, the marginal propensity to consume is to be less than 1, but the use of "China Statistical Yearbook" in the data, collated and calculated by the marginal propensity to consume different income groups of farmers, there are some data is greater than 1, in particular, low and middle-income group of marginal propensity to consume and 2005 in addition to high-income households other than the income groups of farmers. This is mainly because the growth in income of the low and middle income group of farmers in that year was not sufficient to meet the general increase in consumption, and therefore farmers had to rely on utilizing their existing savings, either by borrowing or by relying on handouts to consume. The fact that the marginal propensity to consume in 2005 was greater than 1 in most of the income groups may be related to the rise in prices (the consumer price index for rural residents rose by 4.8% in 2004 and 2.2% in 2005, both higher than the rise in the consumer price index for urban residents and the consumer price index for all urban and rural residents), which made it impossible for farmers to meet the increase in income in that year due to the rise in prices and the sharp rise in consumption.
4. In 2008, the marginal propensity to consume of low-income households was still greater than 1, and even exceeded that of 2007, reaching 1.92, which indicates that this part of the agricultural households, in order to survive, in the period of high prices, still rely on savings to maintain life (
5). In 2008, the consumer price index for rural residents increased by 6.5% over the previous year, exceeding the level of increase in the consumer price index for urban residents and the consumer price index for all urban and rural residents).
5. From 2003 to 2008, in general, the marginal propensity to consume of farm households in the five income groups from the lowest to the highest decreased in order. This indicates that the higher the income of the farm household, the expenditure on basic consumption is stable, and thus it has a lower propensity to consume, and the marginal propensity to consume with the growth of income is also decreasing, while the propensity to save is increasing.