A Study On The Dynamic Relationship Between Credit Card And Economic Growth In China

Chinese economy can hardly be away from the influence of the world economy, considering the background of the globalization of economy. With the deterioration of world economic crisis, Chinese exports, one of the troika pulling China's economy growth, has been deeply effected, which means a big challenge to the sustainable, healthy and rapid development of Chinese economy.Meanwhile, though the government announced an increase of RMB 4000 billion government expenditure in 2008, it is not the best choice to promote sustainable development of Chinese economic growth on the basis of expanding government expenditure in the long term, because of the time lag effect and the crowding out effect towards non-government investment that accompany government expenditure, and the limited increase of government expenditure which is restricted by the amount of government deficit.As a result, the spontaneous increase of the consumption of Chinese residents and non-government investment become the core power pushing the growth of Chinese economy, when export is blocked and government expenditure has its own restrictions. Credit card has both the function of electronic currency and consumer credit, which means the wide usage of credit card will promote the spontaneous increase of consumption to a certain extent, thus helping the sustainable development of Chinese economy.This thesis constructs a theoretical model between credit card and economy growth, and a model construing the relationship between credit card and economy growth of China, after having made a brief conclusion and analysis of related literatures. It also performs theoretical and empirical analysis of the dynamic relationship between credit card and economy growth of China, and further validates and explains the mechanism that credit card influences Chinese economy growth, based on the total volume analysis and structural analysis of credit card and economy growth of China.This thesis contains five parts:Chapter one explains the backgrounds and the existing questions of the subject, the significance of this subject, the corresponding research method, source and innovative aspects.Chapter Two reviews related literatures, makes a brief conclusion and analysis of current research outputs on the relationship between the usage of credit card and economy growth of China, and outlines the research guideline of this thesis.Chapter Three analyzes credit card and economy growth theory, builds and construes a theoretical model between credit card and economy growth from four aspects, respectively that the usage of credit card reduces social exchange fee, the usage of credit card increases social investment, the usage of credit card enlarges consumption of residents and the usage of credit card decreases net export, according to a brief analysis of the electronic currency function and consumer credit function of credit cardChapter Four performs empirical analysis of the relationship between credit card and economy growth of China, and further a total volume analysis and structural analysis of credit card and economy growth of China.Chapter Five is conclusion and suggestions.This thesis has made five conclusions, that (1) credit card and the economy growth of China has positive correlation in total amount, GDP increases 0.8825112% when the consumption value of bank card increases 1%;(2)the wide usage of credit card will decrease the social exchange cost of the operation of the economy;(3)when the outside currency supply has been fixed, the use of credit card will reduce the total cash demand of residents, decrease the equilibrium rate of interest on the currency market, MO will be reduced 0.1136364% when the amount of bank card increases 1%;(4)there is a negative correlation between the consumption amount by bank card and the total consumption expenditure by residents in China, which means credit card doesn't well promote consumption;(5) The consumption amount by bank card doesn't affect the total import volume in general trade, which means credit card doesn't influence net export effectively.There are two innovative aspects in this thesis(1) Constructing a theoretical model between credit card and economy growthBased on the analysis of the electronic currency function and consumer credit function of credit card, this thesis builds a complete theoretical model between credit card and economy growth from four aspects, respectively that the usage of credit card reduces social exchange fee, the usage of credit card increases social investment, the usage of credit card enlarges consumption of residents and the usage of credit card decreases net export, explaining the dynamic relationship between credit card and economy growth theoretically.(2) Constructing a model construing the relationship between credit card and economy growth of ChinaThis thesis builds a model construing the relationship between credit card and economy growth of China, performs total volume analysis and structural analysis of the dynamic relationship between credit card and economy growth of China, and further validates and explains the mechanism that credit card influences Chinese economy growth.