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Consumption Credit Popular in Shanghai
Shanghai residents are always ready to borrow money for personal consumption as the individual credit system has been increasingly improved there.
More and more Shanghai residents have begun to apply for mortgage loans to buy a house or a car, or to travel or pay tuition.
According to statistics from the Shanghai Branch of China's Central Bank, the total number of loans granted by all Shanghai- based commercial banks actually increased by about 7.8 billion yuan (about US$940 million) in the first six months of this year.
In addition, the balance of the loans in Shanghai had reached 42.7 billion yuan (about US$5 billion) by the end of last June, accounting for 17 percent of China's total.
The two indicators top those of any other large cities in China.
"The key reason for the fast growth of individual consumption credit lies mainly in the change of people's psychology on consumption," said Qiu Ren'er, a senior manager from the Shanghai Branch of the Industrial and Commercial Bank of China.
Being optimistic about their future income, and living in a world financial center, Shanghai residents have gradually accepted the practice of taking out loans. As long as they consider themselves solvent, they "would like to use tomorrow's money to realize today's dream."
Such psychology on making purchases through loans, for instance, is typically reflected in the housing mortgage loan market. Most of the buyers of the 700 apartments sold each day in Shanghai have applied for a housing mortgage loan. This loan service has so far enabled about 80,000 households to buy their new apartments.
The increasing demand of advanced commodities and services, residents' readiness to accept new things, and the US$4,000 income per capita in Shanghai will jointly contribute to the continuous expansion of individual credit market in Shanghai, local economists said.
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