  Since Reform and Opening-up 40 years ago, China has made remarkable
achievements in economic fields. And consumption activities, including
household consumption, have played an important role in it. Consumer activity
is the end of economic activity, because the ultimate aim of other economic
activities is to meet consumer demand; consumer activity is the starting point
of economic activity, because consumption can drive economic and social
development. This paper selects the economic data of more than 40 years since
Reform and Opening-up, and establishes the Vector Autoregressive (VAR) model
and Vector Error Correction (VEC) model, analyzing the influence of consumption
level and total consumption of urban and rural residents on economic growth.
The conclusion is that the increase of urban consumption and rural consumption
can lead to the increase of GDP, and in the long run, urban consumption can
promote economic growth more than rural consumption. According to this
conclusion, we analyze the reasons and puts forward some policy suggestions.
