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By Sun Zhiyan, the Department of Development Strategy and Regional Economy, the DRC

Research Report No 112, 2013

Abstract:

Increasing domestic consumption is significant for the restructuring and sustainable development of China's economy in the new era. To increase demand, it is critical to increase people's consumption, which largely depends on the earnings of middle-to-low income groups.

The increase in citizen income has lagged behind economic growth for quite a long time in China, not only leading to insufficient demand but also increasing the possibility of economic recession. The report suggests the government should first consider increasing income to stimulate domestic consumption and maintaining stable economic growth.