China's Digital Finance Revolution: Boosting Consumption Levels and Structures

The upgrading of residents' consumption is the key to driving economic development towards high quality, and the promotion of a further increase in the level of China's residents' consumption is conducive to the normal functioning of China's economic internal cycle and is also an important driving force for the high-quality development of the economy. However, with the epidemic, international geopolitics and other environmental impacts, China's residents have undergone major changes in consumption, the trend of expanding the scale of consumption is prominent, and consumption continues to improve the quality of upgrading, the transformation trend is obvious. In-depth study of digital finance how to promote the level of upgrading of residents' consumption, and explore its relevant impact path, so as to establish an effective promotion mechanism for residents' consumption, not only can provide strong support for China's sustained economic growth, but also meet the needs of our people for a better life.

This study investigates the influence of digital finance on the consumption level and structure in China using a panel data analysis approach from 2011 to 2020. The methodology encompasses the construction of regression models to examine the direct and indirect effects of digital finance on consumption patterns and levels. The findings indicate that while digital finance significantly enhances the consumption level of Chinese residents, it also reshapes the consumption structure, leading to a more diversified allocation of consumer expenditures. The positive impact on consumption level is attributed to increased financial inclusion and accessibility, enabling broader participation in the digital economy. Conversely, the negative impact on consumption structure is due to the shift towards online transactions and digital services, which may reduce spending on traditional goods and services. These insights are crucial for policymakers aiming to harness digital finance for balanced economic growth and consumption upgrading.