Research On The Cooperative Finance In Rural Areas Of China During The Transition

With the developing of Chinese banking system reform, state-owned commercial bank and other financial institutes has set up more and more regulation and structure in its modern management and operation. It is well known that more and more people needs modern banking services the same as the other parts of the population includes farmers, urban proletariat and other poor people which commercial financial institutes can not afford by its profit-taking essential. However, modern commercial finance is also unable to provide service for them. So, cooperative institution, which are mutually owned and managed by the poor, are set up to meet their needs.Different with other developed countries, Chinese cooperative institutions has its own characteristic, in fact, we call it is "dissimilation". Based on Marxism and New Institutional Economics, this paper uses some results of proceeding positive research to render a theoretical analysis of modern cooperative financial system.The main points of view of this paper are as following:In China, there is a lot of dissimilation within Chinese cooperative financial organization, include structure, management, operation and development.Traditional cooperative credit institution has three institutional features as following: the identify of the cooperator's economic resources, cooperators being endowed with equal right in management, and cooperators evenly taking profits. But in Chinese institutions, the main points both change after practicing management.In this early stage, cooperative financial institutions were tabbed as "combination of men" while commercial banks as "combination of capital" because of their different capital structure. However, in the course of the development and driven by competition, cooperative institutions have got increasingly awareness of the capital's importance. The cooperative institutions and banks willingly take various measures to enlarge their capital size in modern time. The cooperative bank's capital structue can be defined and classified in reference to the Basel Accord.In Chinese economic system reform recently, there are many problem need to solved at once about rural financial institutions. Many cooperative institutions have not set up as a "cooperative" structure by government and banking controller. This "dissimilation" will be discoved in every perts of institutions at present. While the basic principles are the same for nations, the organizational structure of cooperative finance in each country has different characteristics derived from its unique regime, state situation and its popular viewpoints of cooperative finance. So we must find good and right way to solve the problem about it.Due to its attributes, objects of the cooperative financial institution are multiply. Chinese cooperative institutes act as "double-way" characterestic in national financial system. But ultimately and reasonsably, their objective can not be other than the maximum of the benefitsof their cooperators. In order to realize its aim, cooperation must form an effectual mechanism for controlling and management.Risk-prevent system in Chinese cooperative financial institutions has not set wholly and cause to more profits losing in its operation. Cooperative institutions and commercial banks are two subsystems in the system of modern saving institutions. Their co-existence implicates that each one has its specific advantages in certain fields, but what are their respective advantages? And why do they possess them? We can apply the method of transaction cost analysis and other economic study to answer the question.Scale economics and scope economics are important factors concerning the efficiency of cooperative financial institutions. While the theory of scale of economy answers the question"how big is the best", the theory of scope economics answers'Nvhat is the best to do". Western scholars have made comprehensive analysis on these two questions, the established conclusion is that there exists scale of economy for cooperative financial institutions on the whole, but in certain scope, the scale of economy is unapparent or does not exist.To establish new system and deepen Chinese fiancial reform became more important in the new century. Cooperative financial institutions must transfer and change rapidly to a new sructure inside. Separative ways can be used in practice and maybe parts of institutions has change to commercial financial firms, but for most rural financial insititutions, it must persist in its cooperation base.We'll carry forward the reform of rural credit union steadily and rapidly. We will built the perfect system of cooperative financial institutions through steamlining the structure of property rights and governing structure, steamlining the operating environment, regulations, rules and others. And we belive that we can wait for a new developing tide in cooperative financial institutions in China.