Confucian culture and household consumption under China’s dual circulation paradigm

Expanding consumption demand is one of the strategic bases of China’s Dual Circulation Development Paradigm. This study examines the influence of Confucian culture on Chinese household consumption rate. Using the China Family Panel Studies (CFPS) data and Confucian culture proxy variables based on Confucius temples’ information, our study provides strong evidence that Confucian culture is significantly negatively associated with household consumption rate, suggesting that the greater the influence of Confucian culture, the smaller the household consumption rate. The conclusion remains valid in various robustness tests. The main influence channel is the behaviour of family wealth accumulation for future generations, driven by Confucian values of family bloodline continuation and old-age support. The study recommends facilitating consumption in China by ensuring housing price stability, advocating cultural diversity, and promoting urbanization and citizenship.