The Research Of The Impacts Of Consumer Credit On The Consumption Of Chinese Households

The expansion of domestic demand has become an important strategic measure of our government in the development of economy since the late1990s. As one of the three engines which drive the national economy,consumption is expected to play a major role in the process.Under the background,consumer credit was proposed to expand consumer demand and create a favorable environment for consumption.It has made a significant contribution to the increase of the consumption ratio and the growth of economy.Although consumer credit has developed rapidly in China,the residents consumption propensity appears declining instead of increasing in contrast to the purpose of starting the programme.Yet since the financial crisis hit in2008,consumer credit has drawn more attention than before as a monetary policy tool with the hope to maitain long-term stable and rapid economic growth.Under such a circumstance,can consumer credit really help boost domestic consumption?If it really can,would the impact vary from regions or be different between rural and urban areas? These points are the basis of this paper.Based on modern consumption theory and considering the developing course and characteristics of consumer credit,this paper discusses the relationship between the consumer behavior and consumer credit using qualitative and quantitative analysis methods.It puts emphasis on the heterogeneity of the urban and rural residents consumption.The thesis is divided into five chapters.Chapter One is preface.Chapter Two and Chapter Three introduce the development condition of consumer credit in China and relevant economic theory.Chapter Four tests the effect of consumer credit on consumption by establishing dummy model and Consumption Credit Balance model.Chapter Five is the conclusions and suggestions.The principal conclusions are as follows:First,the results of the dummy model indicate that loaning for consumption affects the consumption of China households significantly.The positive affects of loaning on consumption behavior is greater in rural area than in urban area and the impact is serious in central region,followed in west and east.Second,the loaning variable affects the consumption expenditure siginificantly as a whole.The coefficient of the factor is larger when representing the rural residents.Unlike the former result,the credit balance has little impact on consumption in central region.The policy implications concluded from this paper are:First,some measures should be taken to lift household income and eliminate uncertainties.Second, the reform of the income distribution should be valued by government.Third,enhance the management of the financial market.Fourth,old consumptive idea should be changed.