Abstract

China’s rapid economic development has lasted for more than 30 years，which however，had been mainly driven by investment. Also，it has been a long-term problem that the domestic consumption is insufficient. At this stage，China’s economic development has begun to slow down，with decreased growth rate，reduced scale of investment，whilst the domestic demand for consumption still shows great potential for further expansion.At the same time，there are issues such as overcapacity，the rapid rise of labor costs，etc.，which add pressure to the economy. In addition，significant changes have taken place in the international economic and trade environment，which have reduced export demand from more than one aspects，such as the increased export trade frictions，changes in exchange rates and changes in import policies of other countries etc.. In the long run，China’s economic growth has to become reliant mainly on domestic demand.

Therefore，in this new norm of economic growth slowdown，how to continue to develop China’s economyon an sustainable basis in a coordinate and stable manner，is a major challenge the current phase of development. One viable solution is to change the mode of economic growth and optimize the industrial structure，i.e. to transform the current trade and investment driven economy into a more consumption driven economy. In this process，urbanization can stimulate the consumption demand and promote the country’s economic development.

In 2013，the central government further released the National New Urbanization Plan（2014-2020），which made it clear that during the current modernization development of our nation，the new urbanization process is the key，and pointed out that the new urbanization plays an important role in stimulating economic growth and promoting economic transformation under the new economic norm. Chinese president Xi Jinping emphasized that “in the process of urbanization in China，we must respect the laws of social and economic development，and the quality of towns is the most important. Urbanization should be coordinated with information technology，industrialization and agricultural modernization. The speed of development can neither be too fast nor too slow，so that urbanization and industrialization will be well coordinated，and urbanization and agricultural modernization will be developed in a coordinated manner.”

The development of urbanization is a process in which economic activities，such as the scale of economy and agglomeration effect，play an important role after social development and urban agglomeration reach a certain level. It is also the product of industrialization and modernization development that has already taken place in each of the more developed country. Urbanization is also the process of social development，where the small-scale and scattered farmers’ agricultural production and operation activities are integrated with the towns that adjoin each other，and let them join in the process of mass production. This process is inevitable in light of the productivity increase and social progress.

The development of new urbanization has played a pulling role in all aspects of the rural consumption in China. First of all，the optimization of industrial structure brought about by the new urbanization process will improve the income level of rural residents，and subsequently promote further consumption；secondly，the construction of new urbanization will improve the consumption environment in the rural community，and consequently stimulate rural consumption&promote the uplift of their consumption level；thirdly，the improvement of social security and social welfare is an essential link in the development of new urbanization，which will reduce the uncertainty associated with the income and consumption of rural residents，and promote rural consumption. Last but not least，urban-rural integration is another important aspect of the new urbanization，which means the consumption mode，consumption habits and consumption concepts of urban residents will affect and drive rural residents，with a so-called demonstration effect，to promote consumption in the rural community.

This research in rural consumption is carried out from the perspective of the new urbanization. The overall research theme is：through the study on the rural consumption level under the development of the new urbanization，the paper analyzes the pull effect of the new urbanization development on the consumption demand of the rural residents in China；it analyzes the driving mechanism of the new urbanization development on the consumption demand of rural residents，and conducts quantitative analysis on the pulling degree of specific driving factors on the consumption growth；it then further analyzes those hindering factors during the new urbanization development. Finally，according to the analysis of the pulling effect and hindering factors，the paper puts forward a comprehensive policy framework to promote rural residents’ consumption through the further development of new urbanization.

Chapter 1，Introduction. This chapter analyzes the role of urbanization in stimulating the domestic consumption demand and promoting the sustainable development of the national economy.It summarizes the characteristics of rural consumption in China，as well as the historical urbanization development in the country. Chapter 1 also expounds the research background and the significance of the research topic，and proposes the research subject，i.e. the driving mechanism to the consumption demand of rural residents by the development of the new urbanization. In addition，this chapter also defines the relevant economic concepts，describes the research methodology and techniques，as well as the key research ideas of this project. The possible innovations and shortcomings of this study are also highlighted in this chapter.

Chapter 2，Theoretical Framework and Literature Review. This chapter is structured into three parts. Firstly，it briefly discusses the related theories of urbanization，and introduces various models and branches under different theories，such as the Lewis-Ranis-Fei model，Jorgenson model and Todaro population flow model under the location theory&structure theory；varying forms of the the unbalanced growth theory，including the growth pole theory，center edge theory，cycle accumulation theory，push-pull theory；as well as the Northam’s urbanization development theory；and highlights their implication to this research work. Secondly，it briefly discusses the modern western consumption theory，focusing on the preventive saving hypothesis，liquidity constraint hypothesis and buffer stock saving hypothesis. Thirdly，it summarizes and evaluates the relevant research literature both domestic and abroad，which lays a solid theoretical foundation for this work.

Chapter 3，The Pull Effection The Consumption Demand of Rural Residents by The New Urbanization. This chapter first analyzes the current development of China’s new urbanization，and the present rural consumption status from both qualitative and quantitative aspects. A new evaluation index system including sixteen indexes based on four dimensions to comprehensively evaluate the level of urbanization in a given period of time is proposed；the weight of each index is calculated by entropy method；the level of China’s new urbanization from 2000 to 2017 is quantitatively measured with the new index system，and the issues encountered during the urbanization development are also discussed and analyzed. Secondly，the consumption level and consumption structure of the rural residents in recent 30 years are described. Finally，an economic model is established to analyze the effect of new urbanization on rural consumption quantity and consumption structure.

The research found that the improvement of the level of new urbanization has a positive pull effect on the total consumption in rural areas；the new urbanization will also promote the upgrading of the consumption structure of rural residents，of which the most positive impact is the expenditure in traffic and communication，the second is residential expenditure，the third and the fourth are household equipment，supplies/services and health care；food expenditure，however，is negatively impacted. The conclusion of the study is that the development of new urbanization enables increasing number of farmers to integrate into the urban community，and to adjust their lifestyle in line with the urban living，resulting in upgraded consumption level by this group of people.

Chapter 4，The Pull Mechanism on the Consumption Demand of Rural Residents by the New Urbanization. From four aspects，this chapter studies the dynamic mechanism of the new urbanization to stimulate the consumption demand of rural residents，and analyzes its impact on the total consumption and consumption structure of rural areas. First，the new urbanization will bring about the optimization of industrial structure，and consequently improve the income level of rural residents and promote consumption. Second，the development of the new urbanization will improve the consumption environment of rural society，and subsequently stimulate the consumption demand and promote consumption upgrading. Third，the improvement of social security and social welfare is an essential link in the development of the new urbanization，which plays an eminent role in reducing the uncertainty of rural residents’ income and consumption，thus promoting rural consumption. Fourth，one inherent aspect of the new urbanization is the development of urban-rural integration. The consumption mode，consumption habit and consumption concept of urban residents will affect and drive rural residents，which has the demonstration effect，and can promote rural consumption.

There’refour types of power existing in the pulling mechanism. The increase of farmers’ income brought by the upgrading of industrial structure is the number one pulling force on rural residents’consumption. Number two is the improvement of social security system，followed by number three，the optimization of consumption environment，and finally，the demonstration effect exhibited during the urbanization development.

In addition to the consumption demonstration effect，the other threetypes of pulling powerhave a negative impact on the consumption of food within the consumption structure，with the largest absolute value of the impact coefficiency across all eight consumption categories；among the positively impacted consumption categories，all four types of pulling power have the largest impact on the health care expenditure of rural residents，and the residential consumption ranks the second；only the infrastructure urbanization and the consumption demonstration effect have an impact on rural residents’ traffic and communication expenditure；only the consumption demonstration effect has an impact on rural residents’ entertainment consumption and clothing consumption. Overall，it can be seen that the new urbanization has a direct and comprehensive impact on the quality of life of the rural residents，which will reduce the amount of food consumption and increase the consumption of health care and residential property. During the process of urbanization，the improvement of infrastructure will increase rural residents’ consumption of transportation and communication service，and the integration of urban and rural areas in the new urbanization will make urban consumption have a demonstration effect on rural consumption，and increaserural residents’ expenditure in the consumption of culture，education and entertainment related goods and services.

Chapter 5，Issues From the Urbanization Development and Their Hindrance to Pulling the Rural Residents’ Consumption Demand. Number one issue is the local government’s unilateral pursuit of urban scale expansion causing the industrial structure upgrade to fall behind. This rough urbanization development mode will hinder the positive impact of urbanization on the consumption pulling effect of the rural residents. Number two is the transformation of rural consumption environment not keeping up with the pace of urbanization during the development of urbanization. Number three is social security and public services related to the pension，medical care，education and unemployment falling behind the development of urbanization，weakening the positive impact of urbanization on their consumption demand. Number four is the possible continued expansion of the income gap between urban and rural areas caused by the acceleration of urbanization development，which will prohibit the demonstration effect from being fully exerted，thus hindering the consumption pulling effect.

Chapter 6，Policy Development Aimed at Pulling Rural Residents’ Consumption Demand Through the New Urbanization Development. The two aspects involved in the policy development include strengthening the pullingmechanism of urbanization，as well as eliminating the hindering factors，combined to stimulate rural consumption.The first is to optimize the industrial structure to improve the income and consumption ability of rural residents；the second is to advocate that the government should increase the infrastructure development and the supply of public goods and services，and establish a multilevel supply system of rural consumer financial market to create a better consumption environment for rural residents；the third is to comprehensively improve the coverage of social security，reform the rural endowment insurance system and household registration system. The fourth is to narrow the economical gap between urban and rural areas to maximize the consumption demonstration effect；the fifth is to improve the consumption level of rural residents by strengthening the development of small towns.

Key words： new urbanization；rural consumption；industrial structure optimization；public service；demonstration effect