What is the meaning of consumption?

From the perspective of microeconomics, consumption can meet people's needs, realize the value of goods and make people feel satisfied. Consumption is the satisfaction and embodiment of self-worth. In order to motivate people to reach the consumption level, it is necessary to work hard to make money, so that workers can give full play to their own values and improve their personal abilities, so that society can continue to advance and productivity can continue to develop.

2. Consumption is an important last link in social reproduction. In social reproduction, production, distribution, exchange and consumption are indispensable. Consumption in turn affects production and has a guiding role. The emergence of a consumption hotspot can often guide the development of production, and consumption promotes production, because only things that can be consumed have production value.

From the macro-economic point of view, consumption promotes the circulation of money, commodities, employment and economic growth, which plays an important role in improving people's living standards. Consumption is the troika that drives economic development, and the national policy of "expanding domestic demand" is to encourage consumption and investment, stimulate consumption, make goods sold in time and realize social reproduction.

Consumption is also very important for enterprises. In order to better sell their own goods, enterprises will conduct market research and scientific research, rely on independent innovation to produce high-quality goods that consumers like, promote internal structure optimization of enterprises, guide industrial structure adjustment, promote industrial optimization and upgrading, and form a strict and scientific structural management system.

Extended data

The report of the 19th National Congress of the Communist Party of China proposed to "improve the system and mechanism of promoting consumption and enhance the basic role of consumption in economic development", which not only solved the problem of insufficient consumption of residents from the perspective of system and mechanism, but also emphasized the basic role of consumption for the first time.

The transformation of China's economy from a high-speed growth stage to a high-quality development stage is not only a correct understanding of the new stage of China's economic development, but also opens up a space for the realization of the goal of "enhancing the basic role of consumption in economic development". In order to further effectively release the consumption potential of residents and enhance the basic role of consumption in economic development, we need to do the following work:

1. Implement the new development concept, and adapt to the economic growth decline accompanied by the improvement of welfare level as soon as possible. The fundamental purpose of economic development is to improve the welfare level of residents. As long as the welfare level of residents is improved, even a certain degree of economic growth decline is acceptable. In order to eliminate these concerns, the government needs to increase the proportion of fiscal expenditure in the field of people's livelihood and improve the social security system.

2. Deepen the supply-side structural reform to meet the potential high-quality consumer demand of residents. Residents' consumption is determined by both demand and supply. If it is difficult for the supply side to provide the products and services that residents need, it will be difficult to realize the rapid growth of residents' consumption even if residents have the desire to expand consumption.

3. Narrow the gap between the rich and the poor, especially the problem of excessive property gap. Because the consumption tendency of high-income groups is generally lower than that of low-income groups, the widening gap between the rich and the poor will make the overall consumption tendency of residents tend to decline, thus reducing the consumption of the whole society. To increase consumer demand, it is necessary to narrow the income gap as well as the property gap.

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