The Research On The Microscopic Behavior Of Chinese Farmer Finance

Chinese agricultural population is a special group in the period of social transition which is driven by external forces from the west-led capitalist competition in which china is marginalized. By contrast to coastal cities and other urban areas, china's rural areas are placed at a more disadvantaged position. There has been obvious gap between the urban and the rural which has long been to subjected to sacrifice in the economic strategy because of china's pressure of outscore in the global competition, this is quite different from the coordination of the two part in the western countries. In china's pattern, the traditional mode of agricultural production as well as the rural economic institution severely restricts the farmers'capacity of adopting the role of market entity in the market economy. Due to the economic imbalance and the obstacle from the institutions, it is always hard to effectively bring capital, rural land and other subjects together, therefore the farmers find it troublesome to take loans and the rural areas constantly see the outflow of cash.This study detects that it is the ignorance of the farmers'behaviors and the institutional restraints in the financial service that causes the problems of the capital. The focus of rural financing should lie in the farmers'financing request. In the rural economy, the obstacles the small and middle sized enterprises or the self-employed meet resemble that of the urban economy, there is no essential difference between them. They both result from the lack of credit information and mortgage capital of the market entity. However, compared with the other two enterprises, the farmers are more tied to the influence of the small-scaled peasant economy and the rural institutions. Firstly, the rural families which are producer and consumer rolled into one are stemmed from the peasant economy. Bound to the peasant habit, they take family consumption as priority in production, consumption and capital distribution, instead of market exchanges. Secondly, to serve china's "overtaking the west strategy", the state set limitation on the free flow of rural land, housing sites and housing property in order to prevent the farmers' major property going to mortgage or market distribution. Thirdly, in china's strategy, the policymakers tend to direct more resource to the industry of high efficiency, in addition the fact that the rural social security system has been relatively lagging makes it subjected to the urban economy and weakens the farmers' capacity of entering the market and resource distribution. Last, in the perspective of policy and macro management,"San Nong" is a social issue concerning stability, which means it does not closely follow the market mechanism. Therefore my study is designed to focus on farmer families' financing separated from the rural financing. Beginning with study of the financial micro-behavior of them, I will uncover the relevant mechanism of the interaction of each subject's behaviors in rural financing, making an effort to promote the establishment of system serving the farmers' financing requests.My thesis includes three parts:The fundamental theory of farmers'financing, The subject behaviors, The mechanism of interactive behaviors. The first part includes chapter 1-3, dealing with the outline and structuring of my study from 3 aspects. The second and the third part is the main body of the thesis. The second part includes chapters4-6, focusing on the behavioral traits of the major participants of the farmers financing, which include farmers, rural popular bank and government. Through the empirical research, it is meant to reveal the internal mechanism in the behavioral traits of the farmers financing, of the rural popular banks, the insiders or the governments' red tape and two modes of intervention of the government. The research finds that, according to the modern market economy's demand on the participants' capacity, the farmers have a preference for home financing and have little control on financing over a span of periods and market opportunities, this indicates that china's rural financing still bases on moral bonds. Through the analysis of the rural credits cooperatives and the policymakers, it can be concluded that they have already built up the mechanism of maximizing profits, but the political negative influence should not be overlooked. Considering the two aspects, it can be summed that the farmers are still unable to behave according to the market rules and it is necessary to conduct considerableThe third part includes chapter 7—10 which focus on dynamic mechanism stemmed from the major behaviors of the participants in the farmers' financing. This study looks into this market by the way of restraints on the financing cost, market choice behavior and discovers the efficiency and inefficiency of this market and furthermore prove the monopoly by a minority. However as the number of the participants grows,a relatively effective market mechanism will emerge. In the meantime, by analyzing the administration-based structure of the rural credit cooperatives, it can be advised that it is the best strategy to maintain the balance between the wide coverage of the cooperatives and the sustainability and the county-level-cooperate-body management system. By further analysis of the evolution of the rural credits cooperative, it is discovered that this is indeed a step from credit of specializing to universalizing, and in this process, it is likely to see the lack of management mechanism, which leads to the rise of credit-breach. Therefore it is urgent to improve the rural credit system and besides take advantage connection-based system in countryside and combine it with the bank-credit mechanism.At last, the study makes some proposals on the policy aimed at the peasant household financing. In particular, this issue should be analyzed historically and globally, because of the lack of solid market-mind, more attention should be given to assist the growth during the transition, instead of leaving it solely to the market's hand. In this sense, the management, policymaking and the buildup of a credit mechanism are required to have extensive tolerance for the special functioning of the rural.My study are aimed to devote to such areas:first, highlight the major issue of rural financing which is the peasant household's financing pave the way for the theoretical research. Second, build up approach to empirical study on the issue. Third, offer valid PBC data for further research and policymaking. Forth, encourage innovative thinking based on empirical study, for instance, my study tries to answer whether the farmers make decision on account of reason or tradition; come up with the U-shaped evolution mode of the rural credit market; detect the mechanism that links the connection-based system and the banking system and the equilibrium point of profit and loss in each individual financial body, which is a question tricking many policymakers.