Research On The Pull Effect Of Consumer Credit On China Consumption Demand

In recent year, the downturn in the international economy caused a certain degree of impact on China’s export trade, which indicates that the external demand with instability. The government should unswervingly make expand domestic demand as long-term strategy for economic development and give full play to the basic role of consumption, which was proposed in the Twelfth National People’s Congress. In order to expand domestic demand and stimulate consumption, developing consumer credit has became an important measure of economic strategy of the country. In1999The People’s Bank of China issued "Guidance on conducting personal consumer credit" as a symbol, consumer credit has developed rapidly in our country driven by factors such as in the transformation of the mode of economic development, consumption structure upgrading, national polices to encourage consumption frequently.Based on modern consumption theory and considering the particularity of China economic development and consumer credit, this paper makes a comprehensive study on the pull effect of consumer credit on China consumption demand in a qualitative and quantitative way, emphasizing on the positive analysis. In theoretically analyzed, consumer credit can stimulate consumer demand in five ways, including by the common effect of investment multiplier and money multiplier; by changing consumer’s budget line; by inhibiting rigidity expenditure constraint on current consumption; by allocating funds; by changing consumer attitudes.Empirical analysis is the main research method in this paper. Frist, this paper test the pull effect of consumer credit on consumption in general and conclude that consumer demand of China’s urban residents is sensitive to income and consumer credit. Second, considered that the income gap is too big in China, this paper test the difference of the pull effect in different income level and conclude that sensitivity coefficient of consumer credit showed an "U" trend in five groups from low to high income consumers, which indicate that consumer credit have a strong pull effect on high-income consumers and don’t work on low-income consumers, even produce crowding out effect", but "crowding out effect" will be weaken and disappeared with increasing income. Final, this paper test the way by which consumer credit effect consumer demand and conclude that consumer credit mainly relieve the current liquidity constraint of consumer and increase housing consumption and consumer durables, but don’t make a significant impact on non-durable goods.Finally, based on the foregoing conclusions, the paper propose some recommendations for the development of consumer credit in China.