A Study Of The Financial Impact Of Consumption In China

Consumer demand is an important part of aggregate demand,and an effective way to stabilize the general economic situation is to stimulate the consumption of residents,while being able to hedge against the downward pressure on the economy that the country is experiencing by promoting consumption.Under the new normal of China’s economic development,the obstacle that hinders China’s overall economic transformation is overcapacity.The country has implemented a supply-side structural reform that uses consumption as a new engine for economic development,mainly by upgrading consumption to guide the upgrading and adjustment of China’s industrial structure,developing new hot spots for consumption through supply-side innovation,and creating new impetus for economic growth through consumption drive.China’s active development of consumer finance will not only expand the consumer market and raise consumption levels,but also accelerate the development of the economy and the transformation of the model,and promote the upgrading of the consumption structure.This paper defines the research scope of consumer finance into four dimensions:insurance,consumer credit,savings,and investment,and discusses the mechanism of influencing the consumption of Chinese residents.Firstly,we analyze the theories and internal mechanisms related to consumer finance that affect the consumption behavior of Chinese residents,and then follow the textual analysis method to visualize the development of indicators corresponding to the four dimensions,the development of the financial industry and the content of relevant policies,draw a geographical distribution map of urban residents’ consumption changes,and analyze the current situation of consumer finance and financial industry and urban residents’ consumption behavior in China;then we use the 2007-2020 China 31 provinces to construct a panel regression model to explore the financial impact of residents’ consumption and analyze the impact of different functions of consumer finance on the change of consumption behavior in China for empirical analysis;meanwhile,due to the unbalanced development of urban residents’ consumption in different regions of China,this paper divides them into three regions,namely,East,Central and West,for separate analysis;then the panel quantile regression model is applied to the sample from both consumption level and consumption structure to explore the Finally,the potential of consumer credit to influence residents’ consumption behavior is explored,and the different effects of consumer credit on the role of consumption behavior in each financial asset interval are analyzed.The main findings are as follows: first,consumer finance has a good promotion effect on urban residents’ consumption and can improve their consumption behavior,and consumer credit has different effects on residents’ consumption behavior under different levels of financial assets.Secondly,the positive impact of consumer finance has not been fully realized,and there is still room for development.Finally,the impact of consumer finance on consumption of urban residents in China varies greatly across regions.Based on the conclusion,relevant suggestions are made from four aspects:consumers,consumer finance system,external environment,and development of each region,in order to promote the comprehensive development of consumer finance and improve the quality of urban residents’ consumption.