Abstract
As per currently accepted methodology of national economic accounting, China’s household consumption rate is considered relatively low. This paper discusses the evolvement of China’s consumption over time. Employing two different measures of consumption, I compare the growth rate of China’s household consumption with the growth rates of China’s economy, of its disposable income and of other nations’ consumption. The results of the analysis demonstrate that China’s household consumption is growing vigorously in terms of both real growth rates of per capita household consumption and in total retail sales of consumer goods. Despite its current low level to GDP, China’s household consumption has experienced a significant growth in recent years.
Highlights
As per currently accepted methodology of national economic accounting, China’s household consumption rate is considered relatively low
According to the Expenditure Approach used in national economic accounting, the term “consumption” as used when calculating gross domestic product (GDP) refers to final consumption expenditures, including both household consumption expenditures and governmental consumption expenditures
The growth of household consumption expenditures stayed in pace with the economic growth rate
Summary
As per currently accepted methodology of national economic accounting, China’s household consumption rate is considered relatively low. As per the currently accepted methodology of national economic accounting, China’s household consumption rate is on the low side,[2] as can be seen in Table 1 and Fig. 1. In addition to a few important socio-economic factors, there are still some other important indicators for determining whether household consumption is sufficient. Those include the real growth rate of household consumption expenditures and the real growth rate of total retail sales of consumer goods, among others
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