Abstract:

he global economic crisis resulting from the USA’s financial crisis in 2008 is also a heavy blow to China’s economy. For the first time this crisis has let the Chinese people experience in such a profoundly way the negative effects of underconsumption by the majority of the low and lowermiddle classes. In its essence， the problem of insufficient domestic consumption demands is related to the fundamental problem of the social class structure. For a long period， China’s institutional arrangements are in support of a productiondirected society rather than a consumptiondirected society， and China is not prepared yet to move toward the latter. What accounts for the persistence of the productionoriented society is the strategy of lowcost development. This paper examines and reflects on the logic and the consequences of such a strategy， and concludes that， in the era of overproduction， with geographical expansion of the market approaching to its maximum， China has entered the stage of social expansion of the market. In so doing， China must adjust the social class structure， give up the productionist view of human resources， treat the laborer not only as a productive factor but also as consumers or a consumer market， and thus push the productiondirected society toward a consumptiondirected society.

Key words: consumptiondirected society, the Financial Storm, productiondirected society, strategy of lowcost development