The Research On The Financing For Rural Transportation Main Lines

On Feb. 1 2009, the Chinese Communist Party Central Committee and the State Council issued the new CCP Central Document No.1 named ’The Opinions on Promoting the Agricultural stable development and Farmer’s Income Sustainable Growth’. The new CCP Central Document No.1 has emphasized the problems of agriculture, rural areas and farmers 6 times consecutively, which contributed to totally 11 Central Documents No.1 with the agriculture, rural areas and farmers’ problems as core issue. The Party and the Central Government emphasized that solving the agriculture, rural areas and farmers’ problems would be not only the guarantee for long-term stable development of China’s ecnonmy, but also the base of our internal-need-driven economic model. The establishment of new rural areas is now the major speedway to solving the agriculture, rural areas and farmers problems, as well as the practical way to accelerate the China’s industrialization, civilization and modernization. The core issue of establishing the new rural area is the development of the rural ecnonmy with a top priorty of enchancing the transportation in the rural areas. It has been the major practical focus and the unanswered academic problem to build the efficient rural transportation main lines and simultaneously make full use of their radioactive and influencing effects to crack the rural transportation dilemma and eventually enhancing the rural regional ecnonmy. However, these have not been any clear definitions for rural transportation main lines. Nor can we find any research on the financing for them. Combining the difficulties our rural economy faces for the transportation underdevelopment, this article puts emphasis on the fact that China must devote to establish rural transportation main lines to solve the rural transportation problems, which eventually solve the agriculture, rural areas and farmers’ problems. China is still a developing country. On one hand, the central government need enormous fund to provide public services. In the year of 2009, budget deficit for the central government has reached 950 billion RMB. It is almost impossible to rely solely on the government for rural transportation main lines. On the other hand, China’s household savings had reached 20 trillion RMB. The enormous household savings has become a new possibility for rural transportation main lines. But since rural transportation main lines generally have lower profit level than normal freeways and process the characteristics of the sub-public products, we need both the supports from the government and the wider financing channel from the market operations to enhance the efficiency. Based on the current facts of China, this article starts from the truth that the rural transportation main lines processes basic characteristics sub-public products. It discusses the necessity and the possibility of rural transportation main lines and the market operations for rural transportation main lines financing. Based on all those, we analyze financers’ group behaviors, risk control in financing, financing vehicles, etc. Specifically, there are 10 chapters in this article.The 1st chapter introduces the research background, framework and methods. It brings higher demands for rural roads to build socialist modern rural areas and freeway economic zones brings. We conclude that we must develop the matching rural transportation main lines to accelerate rural economic development and transportation between cities and rural areas.The 2nd chapter mentions the relevant concepts of financing and the effects on rural transportation main lines. Compared to the financing characteristics of freeway constructions in developed countries, this article analyzes how financing system for China’s freeway and rural road evolve. We conclude only through wider financing channel by market operations and governmental support, can we better solve the fund shortage in the construction in rural transportation main lines.The 3^rd chapter discusses the connection between rural transportation main lines and freeway economic zones. It analyzes the positive effect freeway economic zones have on the surrounding social, economic and biological environments. Through difference in difference method, the regression result clearly identifies enormous effects of freeways on the economic development in the matching areas. Moreover, it shows the decreasing effects from the offshore areas in the southeast of China to the middle-west areas. This article concludes that after the financial crisis, China will reach another peak era in which freeways are developing fast. Local government should base their rural transportation main lines on the freeway layouts and speed up the construction through market operation to maximize their enhancing effect on regional economy.The 4^th chapter researches on the group behaviors of investor and contractors along with their effects on the construction of rural transportation main lines. The article analyzes group behaviors of investor and contractors through evolving and competitive analysis. Evolve and competitive analysis can clearly indentify the moral crisis and information asymmetry. This provides theoretical base to financers and relevant departments to make strategic decisions and established a more secured program and system for the implementation of the financing. The 5^th chapter introduces a more mature method indentifying risk. Based on the categorizing of risk in the financing for rural transportation main lines, this chapter systematically introduces the risk measuring and controlling specially for rural transportation main lines construction.The 6^th chapter lays out a blueprint for rural transportation main lines financing. It systematically researches on financing channels, resource allocations, financing management and financing system. This chapter concludes wider financing channels, allocating through market operations, systemizing program and legit activities are essential for financing difficulty in rural transportation main lines.The 7^th chapter researches on the possibility of using creative financing tools and securitizing asset in rural transportation main lines on their characteristics and also recommend the policies and suggestions.The 8^th chapter introduces the application of auction mode for fee-collecting right in rural transportation main lines.The 9 chapter researches on the effects of PFI financing method on rural transportation main lines. It is a revolutionary creation in the supply of public products. This chapter compares the PFI and BOT system. Under the circumstances in which government is short of fund, PFI would be a desirable way of financing for rural transportation main lines.The 10^th chapter concludes the above analysis, recommend relevant policies, and look forwards into to future research direction.