By Wang Nian & Su Nuoya, Research Team on “International Experience and Domestic Practices of the Development of Consumption Finance,” Institute of Market Economy, DRC

Research Report, No.183, 2021 (Total 6248) 2021-7-2

Abstract: Consumer credit is a significant policy tool for implementing demand-side management, promoting consumption, and unleashing consumption potential. China’s consumer credit market developed from scratch with a limited market value and advanced mainly by copying the growth pattern of others. Since reform and opening up, the growth mode has shifted toward innovation-based development, the market share has increased rapidly, market entities are greatly enriched, and innovative service channels are broadened through refined institutional systems. It has made prominent contributions to driving consumption upgrading, releasing consumption potential and boosting the vitality of innovation and entrepreneurship. But it should be noted that China’s consumer credit market still sees insufficient and unbalanced development. The institutional system and financial infrastructure need to be improved, the operation of market entities remain to be regulated and some new challenges brought about by financial technology innovation need to be responded. For future work, related departments need to promote the development of a unified regulatory framework, ensure a fair and orderly environment for market competitions, further refine financial infrastructure, enhance the protection of consumers’ rights and interests, and quicken efforts to flesh out relevant laws, regulations and institutional systems. While encouraging innovation, the authorities need to ensure that the consumption credit market could develop in a sound and steady manner.

Keywords: consumption credit, problems and challenges, policy options