A new research report from a cohort of China’s leading universities indicates that mobile payments plays a key role in driving consumption levels.
The “Digital Finance Openness Research Report” (数字金融开放研究计划) indicates that mobile payments are expediting household consumption in China, as well as driving “optimisation and upgrade” in the structure of Chinese consumption to become a new engine of domestic demand.
The report released on 11 October was jointly prepared by Peking University’s Digital Finance Research Centre, Shanghai Jiaotong University’s China Financial Research Academy, Zhejiang University’s Internet Finance Research Academy, Renmin University’s Financial Inclusion Research Academy and Ant Financial.
According to the report mobile payments are driving a 16.01% rise in Chinese household consumption, as well as a 1.65% decline in the Engel co-efficient, accompanied by large-scale increases in education, culture and entertainment consumption.
Mobile payments are also driving a more rapid increase in rural and low-income consumption in China as compared to urban and high-income demographics.
In the Chinese cities mobile payments account for a 12.79% increase in consumption, while in rural areas they are responsible for an estimated 22.10% rise.
Mobile payments have driven a 1.20% decline in the urban Engel coefficient, as compared to a 2.28% drop in rural areas.
Data from China’s National Bureau of Statistics indicates that in the first half of 2019 domestic consumption made a contribution of nearly 80% to economic growth, with end consumption expenditures making a contribution of 60.1%.