| Due to the reform and opening policy, Chinese economy has undergone a rapid growth in recent 30 years for its fast industrialization and urbanization. From 1978 to 2009, China's GDP has increased annually at the average of 9 percent and this rapid growth depends more on investment and export and much less on the growth of domestic consumption. While entering-the 21st century, along with the more intensified international competition and trade protectionism from the financial crisis, the exchange rate has become the focus of the international competition. Therefore, the sustainable development of Chinese economy could not be possible by improving the investment and export only and the transformation from the export-oriented economy model to domestic-oriented model, that is, the growth in domestic market can be the chief impetus to its sustainable economic growth. Now in China, the rural market, though currently backward, has much potential and therefore one of the key issues is to promote the consuming ability of 700 million farmers, thus cultivating and activating the whole rural consumption market.The consuming ability of Chinese rural inhabitants will be improved only in case that rural economy as well as people's income has a quick development. Besides, the development of rural economy cannot be realized without agricultural capital investment. At present, there are mainly two channels for this investment, one is from the public finance funds, and the other is from credit loans. However, there are some hard constraints to the public financial funds by the government. By contrast, to increase the credit investment in the rural area through the reform of rural financial system seems a more feasible way. To take the latter channel, we need to form and make rapid development of the rural financial market in our country, especially to focus on cultivating and complementing rural financial institutes, and to unblock the inflow channel for the credit funds. India, a developing and big country like China, has maintained the rapid annual growth rate of 6% in recent years and become the spotlight all over the world. Bordering China, India has a similar national conditions and a large agricultural population, which makes developing rural economy as the top priority. Despite the differences in the social systems between the two countries, there exists a comparability and similarity on their periodical economic development and historical conditions, preliminary target and major procedures of financial reform. India's financial and legal systems which originated from the British Colonial period have efficiently enhanced the high coverage and its valid service of the rural financial constructions, which is worth learning for Chinese rural financial reforms.This thesis is an attempt to propose an idea of creating a rural financial system under the new-type rural economic system based on the analysis of the comparison in rural financial systems between India and China and India's experiences and legal systems in the process of creating rural financial system combined with the requirement of Chinese rural finance. It is aimed at providing a thought for the reform of the Chinese rural financial market and exploring an unimpeded stage for transferring the credit resources in order to develop rural economy, promote the rural consumption and enhance the sustainable development of China.This thesis is divided into six chapters.Chapter 1 is introduction. Firstly, this section described the background and significance of the topic and gave the concepts of financial system and rural finance. Secondly, this chapter reviewed the relationship between finance and economic development, and also the canonical developing form of rural finance. Thirdly, this chapter analyzed the domestic and overseas scholars'evaluation on rural finance market of China and India, and then introduced the structure arrangement, study method, innovation point and insufficiency of this thesis.Chapter 2 is a comparative study of rural economy between China and India. The evolution of a country's financial system is always adapted to the economic base of its specific period. Analyzing development characteristics of the rural economy is necessary before the analysis of rural financial system. Detailed analysis of the stage, characteristics and problems of economic development in rural areas of China and India is made. This chapter sets forth the different demand for rural financial of the two countries at different stages of economic development. Because of the backward rural economy before the market-oriented reform of China and India, the need for rural financial and the need for corresponding financial institutions of the two countries are not strong. The development of the rural economy requires the attention and nurturing of rural financial markets. Similarity exists in the stage of economic development of China and India, two populous countries. But because of different economic development path of the two countries, current level of economic development, per capita GDP and the degree of currency of China are much higher than that of India. Arable land in India is much more than that in China and the use of agricultural mechanization is much higher than that of china because of the two "green revolution" in India. The basis for financial development in India is much better. In India, more emphasis on rural financial services is made, the coverage of rural financial institutions of India is much higher than that of china, and the rural financial system of India is much better than that of China, all mentioned above improve and protect the capital investment in agriculture in India, and sustainable development of agriculture in India is ensured.Chapter 3 is about the Comparative Study of the financial system of China and India. A country's rural financial system is a vital part of the national financial system. In this chapter, a more detailed comparative study of the financial system of China and India is made, including the improvement and the financial supervision organizations of the evolution of the banking system, the insurance industry, capital markets (stocks, bonds, currency, foreign exchange, and financial derivatives). It demonstrated the continuous process of construction and improvement of China's financial market, while India's financial system is the most developed in emerging economies. This chapter also compares the two banks with further index system, the number of financial institutions, assets, liabilities, non-performing loans, benefits and other aspects of banking institutions to make a detailed quantitative comparison between the two countries. The reform performance of the banking system is evaluated; the constraints of state-owned Bank of the two countries are discussed. According to the comparison, Indian banking industry has more forms of ownership, through the market mechanism and legal means, India has strengthened the monitoring and connection through the implementation of portfolio securities and credit guarantees to reduce credit risk in rural areas. The management of Indian banking institutions is much more standardized, and it has higher performance. These advantages are the cornerstone of its successful implementation of the "leader plans", which are high-quality financial services in rural areas.Chapter 4 is concerning comparative analysis on China and India village financial system. Based on the analysis on the village financing institution development process, the functions and diagram of Chinese and Indian financing institutions were listed in this chapter. In the process of characteristics contrasting, the trends of Chinese financing institutions were analyzed. Diversification is the main trend of Chinese financing institutions development. At the same time, compared with India, Chinese financing institutions lack to be like so explicit layer divisions in India, exist each village financing institution fixed position and special feature drab blemish. Compared with Chinese, layer divisions were more explicit in the nation, area and canton in Indian financing institutions. Especially they paid attention to services to the village finance of the poor and secluded regions. This chapter also pointed India village financial market foundation was better in the institutions distribution, interest rate marketing and usage of accounts system. Especially we emphasized the promotion of India village financial market laws to the financial market constructs. Lastly, this chapter pointed out that more perfect agriculture insurance system in India lowered the risk of credit loan, helped its innovation of credit products, and pushed the development of India village credit market.Chapter 5 is concerning comparative analysis on China and India circulation of financial mode. Firstly, this chapter expatiate the theories of financial mode and analyzed the circulations of mini financial modes in China and the supervision on mini finance of village financing institution in China. Then, the circulations of mini financial modes and mini financial risk management in India were analyzed. Based on those, we compared Indian financial coupling with Chinese group coupling and pointed out that the trains organization, exercise of self-help group and the rule and law of India were important lessons for China.Chapter 6 is mainly about the main conclusions and inspiration for policy. This chapter summarized the conclusions from comparative analysis on economic foundation, financial system, village financing institution and mini finance between China and India. Based on those conclusions, we discussed some suggestions. They included 1) constructed multilayered, devised and collaborated village financial institution, accelerated the development of village financial market to be political, commercial, collaborated financial; 2) we have to paid more attention to the market laws and construction of laws, consummated law system; 3) accelerated the agricultural insurances; 4) paid more attention to the exercise of coupling mode of mini finance and arranged the relationship between government and village financial market.On the basis of the function concept, mainly adopting comparative analysis methods, this thesis combined with the following studying methods:qualitative analysis and quantitative analysis methods, historical analysis and existing condition analysis methods, comparative analysis and comprehensive analysis methods. Taking the angle of time dimension and relation dimension, this thesis systematically analyzed the phase's characteristics of economic and financial system developing in the two countries from multiple dimensions.The innovation of this paper lies in analyzing systematically two similar stages of economic development of rural financial system construction in leading developing countries, and comes to the following three conclusions.Firstly, according to the characteristics in economic development of China and India, this paper divides the stages of economic development in light of similarities of time and stage of the two countries, and illustrates their respective characteristics in different stages. That is, both countries have invested less credit funds in rural area and agriculture in market economy construction from 1940s'to 1990s'. And China's industrialization and urbanization development have been faster than that of India's due to different economic development path; furthermore China's economic development and economic monetization have been greater than India's. However, the India's agriculture could develop much more sustainably regarding its better agricultural development foundation and rural financial service.Secondly, this thesis analyzed the financial institutions distinction from the banks of China and India in the following aspects:the total assets of financial institutions, the total amount of loan, Stockholders'equity, the average net interest margin, return on asset (ROA), Return on equity (ROE), and various performance indicators of non-performing loans, the results showed that the Indian banking institutions are managed more normatively and with higher performance. This thesis innovatively compared the reform efficiency between the banks of two countries and gave a discussion on the influence of the proprietary rights alteration on the performance of bank; I found the banks'developments of both countries are constrained by the state-owned proprietary. The government's influence on Banks operating is in-neglectable. The reform of the financial system can not keep pace with that of economic. For the reform of China's banks, to change the performance level of banks, we must combine the reform of state-owned banks with structure governance.Thirdly, form the analysis of rural financial institutions and micro financial operation mode in China and India, I found the sound legal protection of India rural financial institutions and agricultural insurance for risk sharing guaranteed the India's rural financial institution to constantly innovate rural financial products and improve their investment in the rural areas. Therefore I put forward the idea that the development of China's rural financial market must be accompanied with legal system improving, fixing the position the system of new rural financial institutions on the institution basis, developing agricultural insurance and reasonable taking use of the function of government to perfect the rural financial system.
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