Data Analysis of Consumption Upgrading of Urban Residents in China

In the process of deepening the supply-side reform, China’s economic operation has shown a good momentum of steady development, and consumption has begun to play a prominent role in promoting economic growth. However, there are still many different opinions on whether it is “consumption upgrade” or “consumption downgrade”. Based on the eight types of consumption data of urban residents in China from 1993 to 2016, this paper uses the time-series global principal component analysis method and the ELES model to empirically analyze the longitudinal time series data from the three levels of consumption level, consumption structure and consumer satisfaction. The results show that the consumption level of urban residents is increasing steadily, the consumption structure is continuously optimized, and consumer satisfaction is significantly improved. At this stage, China is indeed in a period of consumption upgrading, rather than the consumption reduction proposed by the private sector. Therefore, under the background of supply-side structural reform, measures such as improving the income distribution system, improving the quality of labor supply, and developing scientific and medical equipment are the fundamental ways to accelerate the upgrading of China’s consumption.


Introduction
Since 2015, China's economy has entered a new normal, showing that although consumption has risen, the economic growth rate is slow, which is caused by the "mismatch of supply and demand". Mao Zhonggen (2019) pointed out that the main problems faced by China's consumption development at this stage are the poor quality of the consumer environment, the imperfect consumption system, the lack of supply of high-end consumer goods and services, and the inferiority of products and consumption inequality [1] [2]. The central government proposed a supply-side structural reform. Premier Li Keqiang (2019) proposed that in the past year, the supply-side structural reforms will be deepened, the vitality of the real economy will be continuously released, and consumption will continue to escalate [3] [4]. On the other hand, according to Maslow's hierarchy of needs, as people's living standards improve, people's needs will develop from lower levels of meeting physiological security needs to higher levels of respect and self-realization, manifested as consumption upgrades. This paper combines the previous research literature to define consumption upgrading as follows: the process of continuous improvement of consumption level, optimization of consumption structure, and transformation of consumption quality from low level to high level. At the same time, the frequency and variety of consumers are gradually expanding, and the consumption concept is more open and innovative. People gradually pay attention to the quality and mode of consumption, and the consumption style shifts from the low end to the high end, also the consumption content is from material to spiritual.
Li Pumin (2019) believes that today's consumption presents a series of prominent changes, from quantity to quality, from imitative consumption to personalized and diversified consumption [5]. The overall scale of household consumption continues to expand, the consumption power of residents continues to increase, the consumption content is more diversified, the consumption pattern is more convenient, and consumers pay more attention to their own value and sustainable development. But it still exists in the process of consumption upgrade the latter problem such as insufficient consumer supply, residents' ratio rise too fast; these phenomena have caused some residents to feel the decline in the consumption experience, such as Shi Xinran (2019), the contribution rate of GDP and consumption to GDP. As well as data on per capita disposable income, the study found that survival-type consumption still dominates [6]. Therefore, "consumption downgrade" has become a hot word since 2018. Many people cite a lot of cheap shopping platforms to prove that young people's propensity to consume tends to downgrade. This paper will explain that China's urban residents are in the consumption upgrading stage from three aspects: consumption level, consumption structure and consumer satisfaction. In the past, the research on consumption upgrading only involved two aspects of consumption level and consumption structure. This paper proposes the level of consumer satisfaction and analyzes it through the model. The time-series global principal component analysis method is used to measure the consumption structure optimization degree based on the eight major consumption data of urban residents in China from 1993 to 2016. The comprehensive score is given and the time-series curve is drawn. Then the ELES model is used to measure the marginal tendency of 8

Literature Review
Consumption downgrade is relative to consumption upgrade. Consumption degradation generally shows an increase in the proportion of consumers' survival consumption, or a certain reduction in efficiency, experience, personality, taste and attitude, or consumers are low-quality, the pursuit of low-cost and inferior products. At present, some domestic scholars have given corresponding theoretical explanations for the argument that "China is now in the stage of consumption upgrading or consumption degradation". Ma Zhengui (2018) believes that the consumers who are keen on shopping on Pin Duo Duo may not have enough spending power, but if the consumption level of the third or fourth tier continuously stimulates an emerging consumption life, it is also their "consumption upgrading" [7]. Ma Qiji (2018) also believes that the "marginal business" and "marginal economy" methods have been adopted in shopping platforms such as Pin Duo Duo, and the low-quality and low-priced products, along with the counterfeit and inferior products constitute a "low-end market" to meet a part.
The demand, this part of consumers in the pursuit of high cost performance is not in the consumer downgrade [8]. Xue Junmin (2019) analyzed that the diversification of food consumption led to the diversification of consumers' choices, and the upgrading of food products, which inhibited the reduction of Engel's coefficient. Therefore, this phenomenon is not a demotion of consumption, but a upgrading of high-quality consumption [9]. Huang Juan (2019) found that the high-level consumption expenditure of Chinese residents in 2016 increased by nearly 3 percentage points compared with 2013 [10]. At the same time, there is also a voice supporting the theory of consumer downgrade. Li Meng (2018) based on the latest statistics, In the first half of the year2018, the growth rate of China's total retail sales of consumer goods reached its lowest level in 15 years.
In July, the sales growth of domestic large-scale retail enterprises decreased by 3.9%. He believes that China is currently in a period of consumption downgrade [11]. Kuang Xianming (2018) refuted this. He believes that consumption upgrading should be based on the continuous increase in the proportion of service consumption in the consumption structure of urban and rural residents. The growth rate of total retail sales of consumer goods cannot objectively measure the trend of consumption development [12]. In terms of judging whether consumption is degrading or not, Tan Haojun (2018) believes that the key depends on whether the consumption pattern shifts from the middle to the high end, whether the consumption content shifts from the spirit to the substance, and whether the consumer's concern shifts from quality to quantity [13]. Sun Feng (2019) used the theoretical research of consumer sociology to find that functional consumer demand tends to be degraded, meaning consumer demand tends to escalate, and symbolic consumption plays an increasingly important role in consumer taste and fashion [14]. Shi Mingming, Jiang Zhou and Zhou Xiaoyan  shows the characteristics of consumption stratification, which is not the difference between "consumption upgrading" and "consumption demotion". In other words, the change of residents' consumption in the short term is mainly the difference of consumption upgrading speed between different groups [17].
Contributions of this paper: First of all, most scholars have studied from the perspective of the current situation and influencing factors, and these studies are based on their recognition of China's current stage of consumption upgrading.
For the debate between the official and private consumption upgrades and consumer downgrades, although a small number of articles give their own understanding through textual combing, there is currently no literature to fully demonstrate from the perspective of data and models. Secondly, this paper puts forward an analysis of the level of consumer satisfaction, which is more innovatively measured by the indicator of marginal propensity to consume.

2) Level of Consumption structure
The consumption structure is the proportional relationship of various types of consumption data purchased by people during the consumption process.
Among them, the proportion of food expenditure in residents' consumption expenditure is an important indicator to measure the consumption structure of residents, namely Engel coefficient. According to the data from 1993 to 2016, the Engel coefficient of urban residents in China has continued to decline, from 50% in 1994 to 29.3% in 2016. This is also in line with Engel's rule of consumption structure change: with the increase of residents' income, the share of expenditure on food will decline. According to the definition of the UN Food and Agriculture Organization, the consumption expenditure of urban residents in China has already crossed the "well-off" from "satisfaction" and entered the stage of "rich". Open Journal of Social Sciences At this stage, the residence standards of urban residents in China are improving year by year. Consumers tend to use more consumption expenditures for the pursuit of high-quality consumer goods and service consumption.
Wen Qixiang and Ran Jingfei (2005) believe that the optimization of consumption structure is the process of transforming mainstream consumer demand from low to high level, which can be expressed in two forms. One is that original commodity projects will still be consumed, but the original consumer projects will develop to a higher level. Consumers have higher requirements on basic and traditional consumption, and pay more attention to the quality of food, clothing and other consumer goods. The other is that new and higher-level consumption items have been added, the composition and proportion of consumption have changed, and the consumption structure has become more and more advanced. After consumers meet their basic consumer needs and traditional consumer demand, they will increase more emerging consumption and potential consumption [18].

Empirical Analysis
Based on the urban residents' consumption data from 1993 to 2016, this section λ is the eigenvalue of the correlation coefficient matrix [19]. In this paper, spss18.0 software and time-series global principal component analysis method are used to dynamically describe the consumption structure optimization degree of cities and towns in China from 1993 to 2016. Based on this, the change trajectory of the overall level of the system with time is depicted, and the comprehensive evaluation of the consumption structure optimization degree is predicted. The standardized data of various indicators in the consumption structure of China from 1993 to 2016 are processed. X 1 , X 2 , X 3 , X 4 , X 5 , X 6 , X 7 and X 8 respectively correspond to the eight indexes of urban residents' consumption structure data from 1993 to 2016, namely, food, clothing, residence, articles for daily use, transportation and communication, education and culture, medical care and other categories. Correlation analysis of data is required before the time-series global principal component analysis. In Table 1, except for the remaining 7 items of housing category and food, clothing and other categories, the correlation coefficient is relatively low, about 0.8, and all the other categories are above 0.9.
The normalized data is subjected to time-series global principal component analysis to obtain the principal component eigenvalues and contribution rates of the respective factors. It can be seen from Table 2 that the cumulative contribution rate of the first common factor has reached 95.041%, indicating that the numerical change of the first principal component factor can basically represent the change of the original variable of the indicator system. After determining the principal component, a new variable F is used to replace the original eight indicators, and it is used as a comprehensive variable of China's consumption structure optimization.
It can be seen from the load factor diagrams in Table 3, the linear combination

2) Consumer satisfaction level
The basic form of the ELES model is: where 1, 2, 3, , i n =  . W i is the expenditure of the consumer goods of item I; P i is the price of item I; X i is the basic consumption demand of the item I consumer product; Finally, the measurement form that is applicable to this analysis model is: Among them, 1, 2, 3, , i n =  takes the disposable income as the independent   Table 4, it can be seen that all the eight expenditure items have good fitting degree, and the test values of various parameters are also significant. According to the regression results, the marginal propensity to consume among urban residents in China is 0.6567, which indicates that 65.67% of the remaining disposable income of urban residents is used to consume these eight categories of consumer goods. According to the table, the marginal propensity to consume of various types of consumption in 1993-2016 is ranked from large to small: food, housing, transportation, culture, education, clothing, medical, daily necessities, and others categories.
According to Table 5, basic consumption includes food consumption and clothing consumption. The marginal consumption tendency of food is higher, reaching 18.3%, while the marginal tendency of clothing is 5.14%. This phenomenon indicates that although the income of urban residents continues to increase, the Engel coefficient of urban residents in China continues to decline, and food is still the main direction and hotspot of household consumption. From the data in the table, even though the basic consumption category is still the main direction of urban residents' consumption, its marginal consumption propensity is still high, but compared with the data from 2008 to 2012, it has The marginal propensity for traditional consumption, like that of basic consumption, declined between 2008 and 2016. The marginal propensity to consume other categories and daily necessities is 3.85% and 1.66%, respectively.
Consumers' willingness to consume such products is decreasing, but this does not mean that consumer satisfaction with such consumer products is declining.
According to the consumption value model proposed by Japanese scholar Kano Kisho, the three categories are distinguished by the degree to which the product and service attributes meet the needs of consumers. Among them, the basic attribute is also called "must have attribute", which refers to the characteristics or attributes that consumers usually think the product and service must have. out the innovative product and service attributes that consumers expect. When products provide consumers with such attributes and meet the needs of consumers, consumers will be surprised. The rising trend of the marginal consumption propensity of emerging consumption fully demonstrates that consumers' willingness to consume such products is enhanced, that is, their consumption utility increases, or consumer satisfaction increases.
Among several types of consumer goods, in addition to other categories and daily necessities, the potential consumption of consumer products is the lowest, accounting for only 4.62%. This may be because on the one hand, China's urban residents as a whole pay more attention to the amount of food consumed. The problem has only begun to care about health care in recent years, which is related to the fact that China's medical care has been in an imperfect state. On the other hand, the country has paid more and more attention to the reform of the medical system in recent years, and is committed to improving public welfare.
Residents enjoy a large number of preferential policies and subsidies in medical treatment. From this point of view, although urban residents in China have less consumption expenditures in health care, they only bear a small part of such consumption expenditures. However, as can be seen from Table 5, its marginal propensity to consume also shows an upward trend, rising from 4.88% to 10.68%, which means the consumption of medical care has increased. Such consumer goods have a single-dimensional attribute, also referred to as "the more the better" attribute, which refers to the product and service attributes that the consumer desires and expressly requires. The more such attributes a product has, the higher the satisfaction of the consumer will be. Due to the improvement of living standards and the improvement of the concept of life in recent years, people have paid more attention to their own health. As the country is committed to improving the medical insurance system, the consumption utility of urban residents will be improved, and residents will enjoy a large number of preferential subsidies such as medical insurance, etc. Consumers will gradually increase their willingness to consume, and consumer satisfaction will increase significantly.

Policy Recommendations
Consumption has gradually increased its contribution to economic growth and The construction of traffic in remote areas should be improved, and the development of the commerce and trade circulation industry [21] should be used to drive the improvement of its overall income level to promote the wider consumption upgrade in China.
3) Reducing the transaction costs of residents' purchases and speeding up the reform of the housing system. Housing is also a hot spot for residents to consume. People often improve the quality of life by improving the living environment. Therefore, the overall idea of deepening the reform of the housing system should be to ensure the sound development of the housing market and build a new housing system. The state should increase the transaction costs of speculative housing, curb the phenomenon of "real estate speculation", and clarify that "the house is used for living rather than for speculation". The government can increase fiscal revenue by charging the standard price for commercial land use, optimize the tax system in the transaction, reduce transaction costs, maximize the interests of consumers, and enable residents to have more in transportation, medical care, etc. The budget, thus is promoting the upgrading of our consumption.

Conclusion
In the pattern of economic growth, domestic demand is the key, and consumption in domestic demand is the core factor. The report of the 19 th National Congress of the Communist Party of China clearly pointed out that "we must further Open Journal of Social Sciences improve the system and mechanism for promoting consumption and further enhance the fundamental role of consumption in economic development". Therefore, the transformation of China's economic structure should accelerate the transition from investment and export orientation to consumption orientation.
According to the National Bureau of Statistics, from 1997 to 2018, the contribution rate of final consumption expenditure to GDP has steadily increased. With the rapid increase in consumption and the rapid growth of the consumer market, domestic consumption has played a huge role in promoting economic growth.
Consumption upgrading has become the first driving force for economic growth and an important "stabilizer" for driving smooth economic operations. Therefore, "actively comply with and grasp the general trend of consumption upgrading, continue to promote consumption, improve consumption level, expand consumption scale, and enhance the rationality of consumption structure is an important measure to do a good job in the current and future consumption promotion work" has a very important theoretical guidance and practical significance.

Conflicts of Interest
The author declares no conflicts of interest regarding the publication of this paper.