A Study On The Impact Of Chinese Household Consumer Credit On Consumption

In recent years,the economic growth of China has gradually slowed down.The focus of economic development has shifted from high-speed development to high-quality development.“the proposal of the CPC Central Committee on formulating the 14th Five-year Plan for economic and social development and the long-range objectives through the year 2035” proposes the new development paradigm featuring dual circulation,in which domestic and overseas markets reinforce each other,with the domestic market as the mainstay.It is not only a major theoretical achievement of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era,but also an inevitable choice to adapt to China's current economic development stage,severe and complex international environment and China's own advantages.As the second largest economy,China has a large-scale consumption market.Therefore,we must expand the internal cycle to support the external cycle.The key to realizing the internal cycle is to expand consumption and continuously improve and optimize the quality,structure and scale of China's household consumption.In this context,household consumer credit,as an important product and measure to promote residents' consumption,coupled with many real pain points,is increasingly concerned,discussed and thought by economic subjects such as regulatory authorities,consumers,financial institutions and micro enterprises.On the one hand,driven by the rapid development of Internet information technology and the combination with consumer finance,the market of consumer finance industry is becoming more and more open.The consumer credit market is growing rapidly,contributing to residents' "ahead of consumption".On the other hand,with the excess supply of the consumer credit,defective products such as cash loans and campus loans have triggered disputes over a series of problems such as excessive debt,excessive credit and violent collection of consumer credit.At the same time,China's residential leverage mainly consists housing mortgages,which are counted as an integral part of household broad consumer credit in China.Although with the strengthening of real estate policy regulation,the residential leverage ratio will gradually stabilize within a reasonable range.The wealth effect caused by the rise of real estate prices is gradually weakening.The debt burden has restrained the development potential of household consumption to a certain extent.China's consumer credit is at the "crossroads" of development.Can household consumer credit stimulate consumption and how does it affect consumption? In order to answer this question,this paper studies the impact of household consumer credit on consumer borrowing behavior,consumption scale,consumption structure and heterogeneous consumer consumption through mathematical model,macro empirical analysis and micro empirical analysis.The full text consists of seven chapters.The first chapter is the introduction.The second and third chapters are the research basis.The second chapter carries out literature review and comparison from two aspects: modern household consumption theory and the influence of consumer credit on consumption.The third chapter discusses the development status of China's consumer credit market.The fourth to sixth chapters are the parts of problem analysis.The fourth chapter studies the impact of consumer credit market equilibrium on consumption behavior by establishing a sequential game model,further extending the setting of macro and micro econometric models from the mathematical model.The fifth chapter empirically tests the impact of generalized consumer credit growth on consumption growth and consumption structure upgrading by using macro inter-provincial panel data.The sixth chapter empirically studies the differential impact of consumer credit and housing mortgages on different types of household consumption with the help of the micro data of China Family Panel Studies(CFPS).The seventh chapter is the conclusion,policy suggestions and the prospect of the development trend of consumer credit in the future.The following conclusions are drawn through research and analysis:Firstly,the equilibrium of consumer credit market will affect household consumption and borrowing behavior.Even assuming that the consumer is "rational",under the condition that the consumer can obtain loans from multiple credit supply institutions,the continuously declining operational cost will lead to the increase of the borrower's total liabilities,the household default rate and the overall risk level of credit supply institutions(banks,etc.).At the same time,the increase of debt scale will enhance the current consumption and inhibit the future consumption,but its overall synthetic effect on consumption needs to be demonstrated from the macro and micro perspectives.Secondly,using the inter-provincial panel data,it is found that the overall effect of household generalized consumer credit growth on the growth of consumption scale is still positive;The growth of consumer credit promotes the growth of enjoyment consumption and the upgrading of consumption structure to a certain extent.However,the effects of generalized consumer credit on consumption scale and the upgrading of consumption structure are weak.Thirdly,using micro household data to further analyze the differential impact of consumer credit and housing mortgages,the study found that for different types of households,consumer credit can significantly promote consumption growth and consumption structure upgrading;The actual effect of housing mortgages is relatively weak or none,which only playing a certain role in families constrained by liquidity.Horizontal comparison shows that the effect of consumer credit on household consumption scale and the upgrading of consumption structure is greater than that of housing mortgage.To sum up,for consumer credit and housing mortgages,we should consider formulating differentiated development strategies and policies,which continuing to encourage and support the development of consumer credit,controlling the excessive growth of housing mortgages and residential leverage ratio.In addition,although the consumer credit has a positive impact on consumption,under the background of the rapid growth of residential leverage ratio,the default rate and the risk level of banks will also increase.It is still necessary to establish a reasonable mechanism to avoid over-indebtedness and prevent systemic financial risks.The research achievements of this paper are expected to be innovative in the following two aspects:First,there is innovation in the study of the impact of household consumer credit market equilibrium on consumer borrowing behavior.When analyzing the market equilibrium,a more realistic sequential game model is adopted,which improves the consumption credit supply ceiling hypothesis widely used in domestic academia.The original hypothesis usually regards the supply of consumer credit as exogenous or related to income.This paper establishes a sequential game model in which multiple consumer credit supply institutions and consumers participate together,with the operational cost of credit supply institutions explaining the reasons for China's family's "over-indebtedness" in theory.The above analysis and research are highly consistent with the current situation of China's consumer credit market.The conclusion of market equilibrium can also better guide the practice.Second,with the help of micro data,it enriches the research on the impact of consumer credit for heterogeneous consumer consumption.According to the criteria of liquidity constraints and real estate,consumer families are divided.The differential effects of consumer credit and housing mortgages are studied respectively.The differentiated policy suggestions and support measures are put forward,so as to better guide the development of consumer credit.To some extent,it broadens the existing research ideas.