By the abundance natural resources and low labor costs, China became the world factory since the reform and open in year 1978, has been producing the commodity of every country. In 2000, the China average salary is only 9,333 RMB, but by 2011 had grown nearly 4.5 times as much, came to 41,799 RMB. While enterprises of the world choose to invest in China, they valued the huge Chinese domestic market, but the internal consumption to economic growth in the contribution rate is still low. Since reform and opening, China is still an export-oriented country, the domestic consumer market is clearly not as good as expected.
This thesis is to study the MPC of different income groups of urban and rural residents in China, to identify the relationship between the incomes and MPC or other various factors. Using Simple Keynesian Model with Absolute Income Hypothesis as the main research methods. The use of ANOVA and regression coefficient analysis shows that Chinese urban and rural residents MPC2001-2010 years of change.
The study found that urban residents'' MPC will be influenced by the positive fiscal policy and MPC has downward trend. The low income class urban resident life has improved. Furthermore, Chinese government to the fiscal policy was unbalance between urban and rural, resulting in consumption of rural residents tend to be conservative, the uncertainty of the future life enhancement.