The Evolution, Innovation And Risk Management Of Rural Finance In China

Modernization of agriculture, the urban-rural hormonious development is the important elements of keeping stability and sustainability of national economy and society. Since carrying out reform and opening-up policy, rural economy is becoming even stronger in our country. However, not only from absolute level, but also from relative level, the gap between urban and rural area is getting bigger. In socialist market economy, in order to build socialist new county, it is necessary to raise considerable funds and change the long-term situation of rural surplus fund spilling out. These require that rural finance perform the function on income-distributing and resource- allocating.Rural finance refers to money flowing, funds moving and credit activities in rural area. Compared to urban finance, rural finance possesses its own features with regard to the servicing objects, operating environments, and professional works. The main contents are as follows:Firstly, the thesis outlines the evolution of Chinese rural cooperative finance, rural commercial bank and finance policy after reviewing the rural finance development theory, innovation theory and rural finance risk-managing theory. It concludes that the evolution of China rural finance exhibits little essential contents or contribution. The thesis finds that well-behaved rural finance is mainly cooperative finance and policy finance by comparing Chinese rural finance with that in some typical developed countries.Secondly, the thesis analyzes the rural finance operating environment, including rural economy and society environment, outlines the scale of rural finance development and operating performance, examines the rural habitants'saving and credit behaviors. It is finds that rural residents'behaviors are affected by the traffic conditions in living area, farmers'age and the income structure, and that farmers'loans is mostly used for necessary living and children schooling, hardly for business and production with questionnaire inquiring information.Thirdly, the thesis analyzes the impacts of traffic facilities, covering dimension, population density and income per capita on the choice of finance institutes and operating sustainability.Fourthly, the thesis measures rural finance development and total factor productivity, and tests the relations between them, and analyzes the effect of rate difference between savings and loans, real rate of savings and loans, the ratio of rural residents'monetary income and total revenue on them.Fifthly, the thesis explores rural finance risk sources from agricultural production, rural non-agricultural activities, the difference of rural residents'livings, society and rural finance policies, put forward rural finance risk managing models. It suggests develpment agricultural insurance, hedge against rural business risk and disperse rural finance risk. Sixthly, the thesis expounds rural finance innovation targets on serving objects, finance institutes and finance managing system. It is deemed to perfect the legal system, clarifying property ownership, render rural financial institutes appropriate policies. Rural financial institutes must adopt right operating philosophy, establish effective organizations, perfect operating mechanism, and create new products and services. On the macro-level, government should transform the policies that do not suit rural economy and society development, improve rural facilities, enhance financial demand in rural production, and bring about innovation in rural finance environment.In short, the thesis sets forth such risk management measures as keeping macroeconomic stability, promoting urban–rural overall development, reforming the policies ignoring the agricultural and rural development, improving rural finance operating situation, reinforcing stock system reforms, realizing multi-property ownerships, enforcing internal supervisory mechanism, reforming traditionally monopolistic complexion, building properly independent accounting relations among financial institutes, and encouraging normal market competition, and forming trade associations to lower risks.