Explore The Development Of The Theory And Practice Of Consumer Credit In China

Consumer credit is becoming a new profit driver in the development of China's banking industry. Consumer credit is a brand new financial product for individuals and families. It substantially altered the service pattern of banks in planned economy in which banks were allowed to take deposits from individuals but prohibited from lending loans to them. It also brought significant changes to the banking ideology and operation model. Consumer credit is affecting the macro-economy in two dimensions: on one hand, it increases consumer demand and raises living standard; on the other hand, it boosts product sales and stimulates economic growth. For domestic commercial banks, it improves their asset quality and profitability, breaks the old business pattern in planned economy where personal deposits were valued much higher than individual loans, and enhances their competitive advantage to foreign banks after China's entry into WTO.However, much improvement is still required in the development of consumer credit business in China. This paper compares the development circumstances and status between foreign and domestic consumer credit business, introduces relevant foreign experience and puts forward suggestions and solutions in the followings including: improving the domestic circumstances, strengthening the analysis and marketing of the consumer credit market, building individual credit system, improving efficiency with better service, and controlling credit risks. The paper consists of four chapters: Chapter 1: IntroductionThis chapter emphasizes consumer credit as a significant financial leverage to economic development and defines consumer credit by comparing the different domestic and foreign definitions of consumer credit.Chapter 2: Development of theories and practice of consumer credit Chapter 3: Development and problems in domestic consumer credit business Chapter 4: Solutions to the consumer credit business in China Consumer credit substantially alters the ideology and operation model of commercial banks in China, and we are looking forward to the growth of domestic commercial banks into internationally competitive modern banks.