The credit rationing of Chinese rural households and its welfare loss: An investigation based on panel data

We examined the impact of credit rationing on the net income and consumption of Chinese rural households by studying survey panel data from 1000 Chinese rural households from 2003 to 2009. Our results revealed that 61.5% of Chinese rural households were rationed in the credit market; 52.0% were completely rationed and 9.5% were partially rationed. Furthermore, this credit rationing caused a 15.7% loss in net income and an 18.2% loss in consumption expenditure for these rural households in China.