Research On The System Innovation Of Chinese Rural Credit Cooperatives

Chinese rural credit cooperatives are special financial system arrangements. Tracking down the bringing background and developing contrail, it could be said that the Chinese rural credit cooperatives are special outcomes with special assignment in the very circumstance. Since 50 year's innovation, Chinese rural credit cooperatives have become one of the most important financial institutions in Chinese financial system and played a significant role in supporting agriculture. But because of the historical, political and institutional factors, some problems in system arrangement of rural credit cooperatives appear bit by bit, such as short of property, not integrated fathering configuration, administrative intervene by the government, and some deriving issues, like moral risks, inside control, outside interference and so on. All these matters restrict the development of rural credit cooperatives and also the development of the"Three Nong"--agriculture, country and peasantry. Before 2003, although the system of rural credit cooperatives had been adjusted and innovated for several times, but the innovations hadn't receipted the anticipative effect, but more formally change and the material problems hadn't been settled, such as short of proprietor, not integrated fathering configuration and so on.On June 27th 2003, the State Council promulgated"The blue print about deepening the reform of rural credit cooperatives", which leads to a new era of rural credit cooperatives reform. Analyzing the background of the new era of rural credit cooperatives is a necessity under the pressure of rural economic development and financial development. According to the blue print, the new reform should obey the general requirements of"Clarifying the ownership, strengthen the restriction mechanism, enhance the service function, proper national assist, and the local movement should be responsible". The government should enhance the management and ownership reform of rural credit cooperatives, gradually make the farmers, rural merchants and diversified economies to be the share holders of rural credit cooperatives, and make the rural credit cooperatives to serve the economic development of farmers, agriculture, and rural economy. The main points of the reform is to perfect the artificial person governing structure, and transfer the management power to the local government, to enhance the responsible of local government on the reform of rural credit cooperatives. The tenet of the reform is to bring the function of rural credit cooperatives as rural financial main force and the financial bonds between farmers into play in the greatest extent. To sum up the 5 year reform of rural credit cooperatives, because of the diversified choice of main body of reform, the absent of property right system and the management system, and the windage of government's financial prompting mechanism, the new era of the reform is a little far away from the goal of the blue print. The effect of the reform is more reflected in the improvement of the financial situation of the rural credit cooperatives, but the transformation of management system and effective service is not so good. Therefore, to sum up the experience and effect of the reform and analyze the gain and loss of the reform blue print is a very important project that has intimate relationship with the deepening reform of rural credit cooperatives and the perfection of rural financial system.Basing on the background, under the correlative frame of reference about the development of rural credit cooperatives, this paper follows the principle of combining theory and practice together, sums up the reform history and experience of our rural credit cooperatives, and expounds a new round of rural credit cooperatives reformation. Then according to the above content, this paper analyzes the body's behavior choosing, the effect of that on the practice of the incentive mechanism, and analyzing the rural credit cooperatives'innovation from the view of designing the innovation aim. Finally, combining the effect of rural credit cooperatives'innovation, this paper points out some system arrangement suggestions about how to deepen the system environment construction of rural credit cooperatives. This paper totally has ten chapters, the idiographic contents are as follows:The first chapter is the introduction to this paper. It has explained the background, aim and significance of this paper, having studied on the foreign and domestic literature review on the related topics, it also gives the logic and research methodology of the paper as well as the innovation.The second chapter is the basic theory for the reform and development of the rural credit cooperatives. As the theoretical base for this paper, first, it set the definition of the cooperatives and cooperative Finance.Then this chapter has explained the basic theories for the reform of the rural credit cooperatives, including the rural financial theory, Institutional Economics as well as the financial development & innovation theories. By comparing the different types of these theories and policies, it briefly analyzes the effect of these different theories on the financial reform of the rural credit cooperatives in our country.The third chapter is review on the institutional change of China's rural credit cooperatives. This chapter reviews on the principal change of the International cooperatives, and analyzes the generative background and its development of China's rural credit cooperatives. It mainly studies on the reform efficient of the rural credit cooperatives in our country before 2003, gives an analysis on the gain and loss of that reform for every time.The fourth chapter is the design for the new reform of the rural credit cooperatives. This chapter studies the background as well as the aim, principals and incentives of the new reform of China's rural credit cooperatives. It also analyzes the thoughts of this reform designed to achieve the aim of the reform, gives a summary of the characters of this new reform by comparing it to the former reforms.The fifth chapter is the action choice of the participators in the reform of the rural credit cooperatives. According to the regulations of the reform, this chapter has made a summary to the responsibilities of the central government, central bank, China's Banking Regulatory Commission and the provincial Credit Union. And it also analyzes the aims and the possible action choices of the different participators. On the base of these analyses, it studies on the effect of different action choices of the participators on the reform development and the reform aim.The sixth chapter is game analysis on the incentive mechanism designed by the central bank. Having the special central bank note which is supported by the central government as the research subjects, basing on the explanation to the design of the issuance and cash of the special note, this chapter analyzes the action of the participators on the issuance and cash, especially on the cash of the special note by using Game Theory. It also analyzes the equilibrium of the game between central bank and the rural credit cooperatives under the unequal conditions as well as the effect of that on the practice of the incentive mechanism supported by the central government. Then, it points that the practice of the capital incentive mechanism could not lead to the maturity of corporate governing structure and the change of operating mechanism.The seventh chapter is the analysis on the ownership system reform and governing structure of the rural credit cooperatives. In this chapter, basing on the review on the design of the ownership system reform model of the rural credit cooperatives, we analyze the corporate governing structure of the rural credit cooperatives with the Agency Theory. By using the comparison analysis, we study the efficient of corporate governing structure under different ownership system arrangement and ownership organization. The results show that insider and outsider-control could not be avoided with the current ownership system and equity structure.The eighth chapter is the comprehensive evaluation of the reform of the rural credit cooperatives. On the base of the literature review on the reform effect, having the aims of the reform and the assessment standard of the cash of the special central bank note as the viewpoint, we analyze the effect of the reform of the rural credit cooperatives chosen from the western part of China with the time series and all-around PCA method. By combining the theoretical analysis, we evaluate the development and the effect of this new reform, and also point that the improvement of the financial conditions of the rural credit cooperatives has reflected this kind of effect. But achievements on the change of the operating mechanism and services for the issues concerning agriculture, countryside and farmers are not good enough.The ninth chapter is the route choice and system arrangement of rural credit cooperatives in deepen reform facet. This chapter summarizes deeply the development and effect in new round reform of rural credit cooperatives, analyses the outstanding problems in reform now and puts forward the thinks and cores about deepening reform our country's rural credit cooperatives, stock reform of property right system,local government retreating from industry administration,function reforming of rural credit cooperative and capital sustain by center government and so on correspond to system arrangement of the reform ,based on reviewed new development of cooperatives finance theory.The tenth chapter is to deepen the reform of rural credit cooperatives system environment construction. In this chapter, the important influence of system environment to the institutional arrangements is analyzed, mainly on the perspective of the relation between the system environment and the institutional arrangements, argued that certain institutional arrangements must be consistent with the corresponding system environmental requirements. On this basis, the author analyze the necessary system environment construction for the deepen reform of Rural credit cooperatives.