Study On The Influence Of Consumer Finance On Urban Residents' Consumption In China

At present,China is going through a period of economic transition.As one of the "troikas" that drives economic growth,consumption plays an increasingly important role in China's economic growth.In addition,the steady increase of residents' consumption is conducive to enhancing the controllability of China's economic growth,so it is crucial to expand domestic demand and to increase consumption for the sustainable development of China.Consumer finance is a financial resource that serves diverse consumer demands.Its asset,wealth,inter-temporal,and confidence effects have a significant effect on expanding consumer demand and raising consumer spending.And the development of consumer finance is beneficial to speed up the upgrade of consumption structure and the transformation of residents' consumption attitudes,furthermore,to raising the consumption level of residents and enhancing the driving effect of consumption on our economy.Therefore,it is of great significance to study the relationship between consumer finance and resident consumption.Considering the completeness of the data,this paper took urban residents as the research object,and explored the impact of consumer finance on household consumption from savings,investment income,consumer loans,and insurance.First of all,through reviewing the research of domestic and foreign scholars,we have a deeper understanding of the connotation and category of consumer finance and the current research status of consumer finance and resident consumption.Based on related theories,the relationship between consumer finance and consumer spending was analyzed in terms of the asset effects of savings,the wealth effect of investment,the cross-period consumption effect of consumer loans,and the protection function of insurance.The results show that consumer finance contributes household consumption.However,the squeeze effect of savings,consumer loans,insurance,and the instability of the investment market will also restrain household consumption to some extent.Then,this paper analyzed the status of China's consumer finance development and urban residents' consumption.Based on the data of urban residents in 31 provinces in China from 2004 to 2016,four evaluation indicators were selected from four dimensions,and the population quality was introduced as a control variable.After that,this paper built a panel data model,and conducted an empirical analysis of the influence of consumer finance on urban residents' consumption.In addition,considering the regional differences in the influence of consumer finance on urban residents' consumption,this paper also conducted empirical analysis on the relationship between consumer finance and urban residents' consumption in the eastern,central and western regions respectively.From a nationwide perspective,the empirical results show that savings provide a strong protection for the consumption of urban residents,and insurance plays a significant role in promoting consumption,while consumer loans have a very slightly positive influence on consumption,and the wealth effect of investment income on consumption has not appeared.The level of self-consumption and the quality of the population have a greater positive influence on consumption.From regional perspective,urban residents in the western region are more dependent on savings and self-consumption.While urban residents in the east and central regions are more effected by consumer loans,insurance,and education.Investment income has significantly boosted the consumption of residents in the eastern and central regions,but the wealth effect on residents in the western region has not appeared.Finally,based on the result of theoretical analysis and empirical analysis,this paper put forward the following relevant recommendations:First,we need strengthen the education of financial knowledge and improve the consumer financial system.Second,promote savings product upgrades and enhance the function of savings protection.Third,standardize the management of investment market and increase the type of investment products.Then,improve the credit market environment and enrich the type of credit products.Fifth,promote the development of the insurance market and improve the social security mechanism.Sixth,we should optimize the structure of consumption finance and speed up the development of market economy.Last but not least,we must vigorously develop the western region and promote balanced regional development.