The Study Of Reconstructing Rural Financial System In The Perspective Of Efficiency

The focal and difficult point of speeding up the development of scientific innovation and realizing a well-off society is in rural areas in China. In order to realize the goals of agricultural development, rural prosperity and the increase of farmer’s income, a sound, strong, healthy and supportive rural financial system in needed. Since the implementation of reform and open-door policies, China’s rural financial system has been playing vital roles in meeting the funding demand in both agricultural production and farmer’s living and rising rural productivity and promoting the fast and healthy development of rural areas. However, in facing the low-level rural economic development and the lagged rural financial system, China’s existing rural financial system is still the weakest portion of whole financial system in China: the severe friction between the demand and supply of rural funds, the imbalance distribution of financial resources between urban and rural areas lead to a rural financial system which cannot meet the demand of agricultural and rural development. The rural financial industry cannot provide sufficient support for rural economic growth and ―the core position of fiancé in the economic development‖ has not been fully embodied. As a result, reconsidering the goal of rural finance reforms and the orientations of rural supportive financial policies and constructing a new policy- and market-oriented rural financial system that is based on the angles of financial efficiency is very important.By surmounting the traditional research paradigm which focus on rural financial risks and functions and based on theme of ―constructing a high efficient rural financial system to promote rural socioeconomic development‖, this dissertation studies the construction of a new rural financial system through integrating theoretical and practical analysis, qualitative and qualitative analysis, and comparative analysis. In actual studies, this dissertation is not adhered to ―if the rural financial system promotes rural socioeconomic development‖ but expand to a macro-angle of constructing a high efficient rural financial system by focusing on rural financial development, rural financial system and rural financial market system.Based on summarizing the existing studies, both abroad and at home, this dissertation reassesses modern finance theories and the main streams in rural finance research, combs out China’s rural socioeconomic development situation and development level of rural formal financial system. This study finds out that the existing rural financial system in China is an external industry in serving for rural economic growth. The reform to and development strategy of rural finance has been long undervalued and neglected, rural financial institutions have been reduced and integrated, large amount of rural credit funds has been flowing out of rural areas. All these have contributed to a worsening rural financial ecology, i.e. losses in functions and services.Based on above findings, this dissertation conducts studies on the cause-effect relations between rural finance development and advancement in agricultural science and technologies, the promoting roles to rural economic growth and the pulling functions to farmer’s income by using the long time serious data on China’s national rural socioeconomic development and rural financial system, both theoretically and empirically. A multi-variable VAR model which includes rural finance development, agri-technology advancements and farmer income growth was constructed and the co-relationships and inter-relationships of these three variables were analyzed by using the Granger causality analysis, the impulse response function and deviation analysis. This study was an overall summary and evaluation for the existing rural finance policies and financial reforms and, therefore, laid a solid foundation for constructing the new rural finance system.Efficient finance supply has an enormous impact on promoting rural economic growth, raising farmer’s income and developing regional economy. China badly needs a high efficient rural financial system to mobilize all available funds and increase rural capital stock. Based on the angle of efficiency, reconstructing rural financial system, perfecting functions of existing rural financial system, raising the efficiency of rural financial system and promoting a coordinated and sustainable development of rural finance and rural economy are the inevitable choices of constructing a new socialist countryside.