Research On The Risk Of Household Debt In China

In recent years,the world political and economic situation has become increasingly severe,and the development of economic and financial industry is facing new challenges.The hitherto unknown COVID-19 outbreak in early 2020 has brought unprecedented pressure and adverse effects to our economic and financial system.In the face of the complex and changeable situation,China's financial system adheres to the bottom line of no systemic financial risks,resolutely fights the battle to prevent and resolve major financial risks,and creates favorable development conditions for promoting high-quality economic development.In the process of sustainable development of national economy,as an important means of smoothing consumption,household debt plays an irreplaceable role in supporting China's economic growth and transformation.However,with the slowdown of household disposable income growth and the decline of savings rate,the rapid accumulation and unbalanced debt distribution have brought many hidden worries to the current macroeconomic and financial stability in China.International experience such as the U.S.financial crisis in 2008 shows that the rapid rise and excessive accumulation of household sector debt will aggravate the financial fragility of macroeconomy,which will lead to systemic risk.In recent years,the debt scale of China's household sector continues to rise.While personal housing loans maintain a rapid growth,short-term consumer loans are also showing a high-speed growth trend,especially the emergence of emerging financial models such as Internet finance,which greatly eases the constraints of household credit,and makes China's household leverage ratio rise further,and the growth rate is significantly higher than the global average level in the same period.At this stage,the growth rate of household leverage ratio in China is very similar to that before the outbreak of the economic crisis in the United States and Japan.At present,more and more attention has been paid to the potential risks of financial system caused by rising leverage ratio and insufficient solvency.At present,many studies have evaluated the solvency and liquidity risk of banks and other financial institutions,but there is still a lack of relevant research on the financial fragility caused by the growing debt risk of the household sector.Therefore,it is necessary to study the household debt and its possible financial risks in China.From the perspective of household debt risk and micro household,this paper discusses the linkage among the risk degree of household debt,the main reasons of debt growth and the solvency of household.This paper mainly attempts to answer three main questions: first,what is the degree of household debt risk in China and whether there are differences among different regions;second,what are the main driving forces behind the rapid rise of China's household debt scale;third,in addition to the continuous increase in the amount of household debt,whether the solvency of Chinese households has changed correspondingly and has an impact on the debt risk of the household sector.This paper attempts to answer the above research questions by combining theoretical analysis,comparative analysis and empirical research.The specific research contents of this paper are as follows: the first chapter introduces the background and significance of the topic,research ideas and structure,research methods and data,as well as research contributions;the second chapter summarizes and sorts out the problems related to household debt in recent years,which are mainly divided into the theoretical basis of the generation of household debt,measuring the index of household debt burden and the growth of household debt.This paper summarizes the four aspects of motivation and the economic impact of household debt,and summarizes the shortcomings of current literature research,which paves the way for the follow-up theoretical and empirical research of this paper;the third chapter makes statistics and Analysis on the debt status of Chinese households.Firstly,based on macro data,this paper examines the basic structure and development trend of China's household debt.Secondly,based on the micro data multi-dimensional survey of China's household debt burden,combined with household current assets,through matching the macro level of the non-performing loan rate of individual,further construct the household financial fragility index.Finally,according to the financial fragility index,we identify the heterogeneity and dynamic changes of financial vulnerable households in different dimensions over time,and focus on comparing the difference of debt burden between foreign households and Chinese households;the fourth chapter is based on the perspective of financial fragility to study China's household debt and financial stability.This paper empirically tests the factors that affect the household's ability to repay,according to the financial fragility index constructed in chapter three and selects the tracking samples of changes in household financial fragility to explore the transmission mechanism of the improvement or deterioration of household financial fragility.Furthermore,we use the method of stress test to simulate the robustness of household departments in China when facing adverse shocks.The fifth chapter is based on the perspective of expected return to explore the reasons for the growth of household housing debt in China.Based on the 2011-2017 Chinese household finance survey data and urban housing price data,this paper takes the weighted growth rate of the average house price in the first three years of the city where the household purchased the house as the expected return,discusses whether the household will increase the possibility of using the mortgage leverage due to the increase of the expected return,and increases the housing loan leverage ratio to purchase the house.At the same time,we will analyze whether there is heterogeneity in the impact of different expected return on home ownership and investment housing,and explore whether there is a transmission mechanism;the sixth chapter is based on the perspective of financial innovation to explore the impact of the development of digital financial inclusion on the growth of China's household debt.This paper empirically tests the digital financial inclusion index of Peking University and the panel data set of China Household Finance Survey from 2011 to 2017 to investigate the impact of the development degree of financial technology innovation on household leverage ratio,and further study the heterogeneity and transmission channels of the impact of the development of digital Inclusive Finance on different debt types;the seventh chapter is based on the perspective of income fluctuation In addition,the paper discusses the interaction among income fluctuation,leverage ratio and household consumption,and analyzes the heterogeneity of the above transmission mechanism for different groups.The last chapter summarizes and summarizes the research content of each chapter and draws the conclusion of the article.On the basis of summarizing the main conclusions of the full text,this paper gives policy suggestions and Enlightenment on the current household debt problem in China,and points out the shortcomings of the current research and the further research direction.The theoretical and empirical research of this paper finds that: Generally speaking,the financial risk of household sector in various regions of China is still in a controllable range.Under the most adverse impact,the potential default rate of household sector is no more than 5%,and the potential loss of banking sector is no more than 2% of total regional debt.However,there are obvious regional heterogeneity and population heterogeneity in China's household financial fragility.As far as regional differences are concerned,the debt risk of the household sector in some coastal areas should be continuously concerned.Household financial risk is significantly related to household characteristics,so it is necessary to be alert to the debt repayment risk of low-income households.From the perspective of mechanism analysis of household financial fragility,whether income and current assets reserve can cope with the financial pressure caused by the increase of unexpected medical expenses and bank debt is the key factor affecting the improvement or deterioration of household financial fragility.From the perspective of the growth motivation of household debt,first of all,the increase of expected return can not only significantly improve the probability of using leverage to buy a house,but also significantly improve the level of household mortgage leverage,especially the expected return has a more significant impact on the leverage level of investment housing.The increase of expected return mainly stimulates the housing loans from the banking sector,and the leverage ratio of housing loans for middle-income households and Eastern households is more significant.Secondly,the financial innovation and development represented by digital inclusive finance can also significantly promote the growth of total household debt,especially the short-term debt and long-term bank debt,and promote the continuous rise of household debt mainly through two channels: household risk preference and household consumption.From the perspective of household solvency,the fluctuation of household income is an important factor affecting household leverage ratio,and then affecting household debt risk.The increase of household income fluctuation will lead to the increase of household leverage ratio.Secondly,in the face of increasing income fluctuations,the impact of household income on consumption will be significantly reduced,which reflects the smoothing behavior of household consumption,especially for households with high debt risk,low net wealth level and middle-aged households,which are more vulnerable to the impact of income fluctuations.Finally,the level of household debt is closely related to consumption.With the change of household leverage,the consumption of heavily indebted households will be more negatively affected by income fluctuations,while the consumption level of households borrowing for consumption purposes will further increase.The growth of household sector debt plays an irreplaceable role in supporting China's economic growth and transformation.At the same time,the level of household debt rises too fast,and the solvency of households does not increase correspondingly,or even fluctuate,which may lead to excessive accumulation of household sector debt and have a negative impact on macroeconomic and financial stability.By combing and discussing the measurement,causes and economic impact of China's household debt,this study helps to understand China's household financial situation,assess the potential debt repayment risk and the main driving forces behind debt growth of households in different provinces and different groups of people from the debt line,as well as the interaction among income,leverage ratio and household consumption.It is of practical and theoretical significance to fully understand the accumulation and distribution of household debt risk in China and pay attention to and prevent it in order to implement more effective macro-control policies.At the same time,it provides a good start and beneficial policy enlightenment for the "14th five-year plan" with the theme of promoting high-quality development.