Analysis of Economic Factors on Restricting Consumption of Rural Residents in China

The restricting economic factors on China's consumer demand in rural areas are mainly peasants' income, interest rates, income distribution, industrial structure and so on. First, income is the uppermost factor that constrains consumption. It reflects that low income of rural residents and uncertainty of sources of income, urban-rural income gap, reduction in expected income by financial crisis and so on constrain rural consumption; second, the product mix available in the rural household consumption market could not meet consumption needs of the rural residents, which depresses consumption potential in rural areas; and third, the current financial and credit environment in rural China is defective, so it is difficult to peasants to get loans either living or productive from the formal financial sectors; but low-income households cannot afford civil usury. Because of lack of a sound financial and credit environment, it is difficult to farmers to carry out large consumption; thereby it constrains the expansion of the rural consumer durables market.