The Impact of Inclusive Finance Policy on Financial Behavior of Chinese Urban and Rural Households

Abstract

With the continuous advancement of social economy and information technology, the concept of inclusive finance has progressively emerged as a critical determinant in the the economic domain, assuming an ever more significant function in fostering inclusive economic expansion. Inclusive finance policy, as a pivotal strategic choice in Chinese economic progress, not only align with the nation’s trend towards mutually beneficial development but also offer rural and urban households diversified asset allocation options and robust protection. Looking back over the past few years, a gradual reduction in the income disparity between Chinese rural and urban households has been witnessed, which has facilitated the participation of a greater number of citizens in diverse financial activities, thereby fostering the inclusive financial development of the entire society. This research utilized data obtained from the China Families Panel Survey (CFPS), which was conducted by the Social Science Survey Centre of Peking University. To thoroughly investigate the distinct effects of inclusive finance policy on the financial behavior of urban and rural households in China, this research employed the difference-in-difference and difference-in-difference-in-difference regression analysis technology. The research found that, particularly in regions with a low financial inclusion index, the growth rate of financial behavior among rural Chinese households would be considerably quicker than that of urban Chinese households during the later phases of inclusive financial policies. Based on the findings, this research proposed that China should persist in advocating for the adoption of inclusive finance and adapt its strategies accordingly to suit the unique circumstances of various regions, so as to advance the progress of inclusive finance policy.