Construction of Personal Consumption Credit System to be Sped up

The development of China's consumption credit is confronted with five major difficulties.

First is the unstable income. The drop in the growth of income among peasants and part of urban residents in recent years dampens their expectation on the future income, which has affected to a certain extent the development of consumption credit business.

The second difficulty is the lack of consumer credit system. Up to now a complete personal credit system hasn't been set up, thus lacking the systematic arrangement for the confirmation of resident's identity, the record and assessment of personal account, income source, personal assets which can be used as disposable mortgage and credit status of the past. In addition, China has so far not yet carried out the registration system of family properties and is lack of professional institutions for personal credit rating.

Thirdly, commercial insurance system hasn't entered the field of consumption credit. Fourthly, the policies and regulations concerned are not complete. For instance, the present regulations for guarantees have no stipulations governing consumption credit, thus making it difficult for consumers to choose effective means of guarantee when applying for consumer credit.

The languish development of secondary market for real estates and too high registration fees for real estates have rendered consumers unable to do registered mortgage for purchasing houses and the liquidity of the property rights of mortgaged houses is weak. Besides, the taxes and fees imposed on automobiles are too high, restricting the demand of consumer credit to some extent.

Fifthly, the structure of banking assets is not reasonable. The duration of housing loan is generally as long as 8-10 years, some even over 20 years, whereas the funds sources of Chinese banks are mainly current and time deposits, of which the longest duration is only five years.

To develop consumer credit the crux of the matter lies in the further improvement of the systematic foundation and policies and regulations. This is first and foremost the work of the country and of the whole society, and also the work of financial system. The People's Bank of China will continue to strengthen the construction of relevant systems and policy support. Now Shanghai has largely completed the construction of personal credit system. With this as a base, the central bank will promote the construction of such a system throughout the financial systems in China and strive to bring forth regulations on housing mortgage loans and bonds issuance as soon as possible. And on this basis, qualified commercial banks will be approved to issue housing bonds with housing loans as mortgage to widen sources for housing construction funds and lower liquidity risks of banks.



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