Discussion On Reference And Countermeasure Of The Development Of Consumer Credit In China

Consumer credit was created from the combination of business creditand bank credit. Developments of commodity economy provided anecessary condition and engine for the development of consumer credit.Consumer credit considered the real products as the principle subject. Withdevelopment of commodity economy and extention of currency circulatedscope, both the real products and currency joined together into theconsumer credit representation. It evolved into a form that relies primarilyon currency circulation accompanied with the mixed form of the twointermedias. The consumer credit form of commodity purchase on creditdeveloped into loansharking credit, bank card credit etc. Consumer creditwould promote effective demand, alleviate the conflict between productionand consumption and promote economy. After the Second World War,western countries, such as the United States, chose consumer credit as animportant tool to stimulate economy growth, and the results showedpositive effects. In commodity economy it has gradually became a moreimportant tool to motivate the economy growth. Consumer credit canpromote consume purchasing power, push the production and investment,and improve employment. Together with fiscal and financial policies, thepolicy strategies will be realized better. Meanwhile the national income isincreased and the assets structure of the commercial bank is optimized. Itwas proved that in western countries, the development of consumer creditpromoted the evolution of products, pushed the development of the realestate industry and the automobile industry, and then became a main tool tomotivate economy growth. Until 1997 the China's government started tonotice the importance of concumer credit. Before that consumer creditmachinism was not encouraged. After the Southeast Asian Financial Crisis,the government started to know the importance of it considering thedevelopment of economy. The consumer credit was picked as an importanteconomy signal and policy tool. After the economy of our country turningfrom the "lowersupply" to "oversupply", increasing effective demand hasbecome an important topic in economy development. Consumer credit canmotivate consumption, expand domestic demand, strengthen the validity ofthe monetary policy and promote macro and micro economy growth. Withthe further deepening of the economy reforming in China, the commercialhousing credit and automobile credit developed quickly in recent years.The government will focus more on the control of the consumer loanaccording to its influence on the effective demand which is the mainimpetus for the economy. The consumer credit is far from developedconstraint by the reality of our economy state and society. The reality of theconsumer credit in china and how to develop it become the important topicpresented to us.In this article, we have listed four sections to analyze the problemsusing the data from financial institutions. The main aim of the paper is topropose methods to develop consumer credit machinism in Chinaconsidering the developed countries's experiencs. In the first section ofthis paper, a brief introduction of the consumer credit including therelated concepts and its history were presented. In the second part thedevelopment of consumer credit in China was described together with itseffects and existing problem. We hope to find out the certain barrier ofconsume credit during the development through the investigation of thispart. In the third part we gave some proposal to the development of theconsumer credit. The long history and mature development in developedcountries provided us good advices to our solution to the problem in oureconomy both on the aspect of theoretical and realistic parts. We caneasily quote their existing theory and experiences to found our consumercredit system. At the same time we need to focus on the reality of china'seconomy state and study the properties of it to initialize an effectivemechanism of consumer credit in china. In the fourth part phasic policysuggestions were made. The foundation of consumer credit could not beerected in a rush. It should be finished in steps together with the wholeeconomy reforming procedure. In the paper the methods according tothree stages of the development were proposed to erect an effectiveconsumer credit mechanism. Based on these efforts were suggested to beput on promote the development of primary markets and the prosperity ofthe secondary market. At last an integrated credit market should befounded by combining the two with insurance market. The consumercredit will develop in a mature and effective market founded.