In the current global economic landscape, which is undergoing profound adjustments, China’s external demand market is facing significant pressure. As a result, there is an urgent need to accelerate the transformation of the economic growth model to one that is primarily driven by domestic demand. Service consumption has been steadily increasing as a proportion of residents’ total consumption expenditure, and its role in expanding domestic demand has become increasingly significant. To further promote this trend, it is essential to increase credit support in the service consumption sector and use professional financial services to facilitate consumption upgrading and ensure smooth economic circulation. The People’s Bank of China has recently announced the establishment of a 500 billion yuan re-lending facility for service consumption and elderly care. This initiative aims to encourage and guide financial institutions to increase financial support for key areas of service consumption and the elderly care industry.
Solid Foundation for Financial Support in Consumption
China has a robust foundation for providing financial support for consumption. A multi-level consumer finance service system, which includes banks, consumer finance companies, and auto finance companies, is relatively well-developed. This system provides crucial support for the stable development of the consumer market. Financial institutions have continuously innovated and launched a variety of consumer credit products and service models tailored to consumption scenarios such as trade-ins and winter sports. These efforts have effectively stimulated market vitality.
Challenges in the Consumer Credit Market
Despite these advancements, China’s consumer credit market still faces several challenges. The consumer credit demands of certain groups have not been fully realized. There is a notable issue with the standardization and homogenization of credit products, making it difficult to meet the personalized and customized demands of consumers. Additionally, consumer credit services are costly, and risk control is challenging. These issues are constraining the further development of the consumer credit market.
Structural Contradictions in the Consumption Sector
Structural contradictions within the consumption sector remain prominent. There is a significant gap in the supply of personalized and high-quality services in areas such as culture, sports, tourism, elderly care, childcare, and medical and health care. Moreover, the infrastructure construction and logistics distribution systems for service consumption in counties are not yet fully developed.
Building a Financial Product and Service System
To address these issues, it is necessary to construct a financial product and service system that aligns with consumer demands. This involves expanding the supply of high-quality financial products in the consumption field. The ultimate goal is to create a development pattern where consumption and finance empower each other, deeply integrate, and form a virtuous cycle. This will continuously release the growth potential of the consumer market.
Monetary Policy Measures
At the monetary policy level, it is crucial to implement a moderately loose monetary policy effectively. This includes fully leveraging the role of structural monetary policy tools and intensifying the guidance of macro credit policies. Financial institutions should be encouraged to actively meet the diverse capital demands of various entities. Efforts should continue to create a favorable financial environment for expanding consumption. This can be achieved by exploring the use of structural monetary policy tools to increase low-cost capital support in key consumption areas.
Regulatory Guidance and Support
Financial regulatory authorities need to study and issue guiding documents on financial support for consumption. These documents should guide financial institutions to enhance consumer financial services. The focus should be on the supply side, strengthening high-quality supply in key service consumption areas such as tourism, accommodation and catering, culture, sports and entertainment, education and training, and resident services. There should also be increased financial support for the construction of consumption infrastructure and the commercial circulation system. Support for auto finance companies and consumer finance companies in issuing financial bonds should be provided. Additionally, research should be conducted on moderately increasing the registration quota for securitization of consumer credit assets. This will promote the moderate expansion of the scope of securitizable assets in the consumption field and increase the supply support of credit funds.
Optimizing Credit Products and Services
Under the premise of controllable risks, cost coverage, and standardized use, financial institutions can optimize credit products and services. This should be done around key scenarios, major strategies, and key groups to provide robust support for consumer credit. Digital finance can be utilized to integrate credit services into various consumption scenarios, enabling consumers to meet their immediate consumption demands with more convenient and flexible payment methods.
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