This article bridges two aspects of China's individual credit industry; its recent history, as seen through its shaping processes and its explosive growth over the last three years, and its future as an enduring growth industry, as constructed by its potential momentum, and by obstacles not yet overcome by the Chinese people.
Around twenty years ago, when China decided to reform its economic system and open its long-closed doors to the rest of the world, consumption by the individual sector was highly restricted by the government’s various economic plans. However, as economic reformation turned out to be a great achievement in terms of rapid growth in gross domestic production over time, China gradually integrated the mechanisms of market principle into their economic system. These mechanisms operated alongside all economic endeavors. Consequently, all pre-reformation restrictions that once tightly limited individual consumption were fast partially, then finally entirely, lifted.
China has witnessed some moderate growth in individual consumption since these changes. Today, while China’s economy continues to thrive through production, the country's success has generated a need for stimulating domestic consumption in order to preserve economic balance. This has led to the introduction of the individual credit industry in China, which operates as a tool to facilitate and augment domestic consumption. From its inception, the industry continues to explode in both its total assets and in its annual number of credit-holding participants. Meanwhile, at present the Chinese people are more and more inclined to use credit to purchase whatever they need, ranging from everyday disposable items to durable goods. As the weight of the individual credit consumption continues to increase in relation to the whole of domestic consumption, the credit industry will become the powerful engine behind China's next economic explosion.
Consider the role the individual credit industry played - and continues to play ? in shaping China’s economy, capturing both the contemporaneous situation’s dynamism and the industry's future potential is now essential. The first part of this article, consisting of chapters one and two, analyses the present situation of individual credit consumption in China via an understanding of its origins, motivational underpinnings, standard practices as demonstrated by users, and position relative to the whole economy. The second part of this article, consisting of chapters three and four, elucidates the individual credit industry’s trajectory from two oppositional points of view: the industry’s limitless potential and its inevitable confrontation with newly emerging, complicated problems.
|