A Study On The Reconstruction Of China's Rural Finance System

The theoriall research and the experience fact has indicated that good and the perfect financial system has the positive promotion to the economic development. On the contrary, incomplete and imperfect financial system has not only no promotion to economic development but also the negative influence on itThe economic environment which rural finance system (RFS) of the developing countries face in general is obviously the agriculture and the rural economy of feeble constitution in the comparative advantage inferiority, in lacks of the government long-term stability support, the rural economic of inborn feeble constitution impacts healthy development of RFS; In turn, the frail RFS is not only no use to the alleviation and the improvement of "San-Nong" instead intensifies it. Therefore, constructing RFS is an important issue which the developing countries face generally, simultaneously must relate closely the economic environment to RFS.This paper planes to how studies and discusses to construction of the perfect RFS to regard "San-Nong" as not only the beginning but olso the goal that the construction of RFS satisfies the fund demand of "San-Nong"as in order to strengthen RFS to promote the agricultural production, to be prosperous to the rural economy, as well as improves the living of the countryside residents.This paper research follows the mentality of "the external environment—the function—the structure or the skeleton of RFS" to how studies to establish one to not only base truly on but also serve for "San-Nong".The economic environment of the RFS located is the agriculture of feeble constitution, the farmer of weak trend, the countryside of weak area, this has the serious influence on its health strong growth of the RFS, and causes it to be feeble & frail; In turn , the feeble,frail RFS also reduces the support of "San-Nong".The empirical research of this paper has indicated the following conclusion:(a) the long-term balanced relations are that the agricultural development and the rural economic development, the scale & efficiency of the RFS have the negative correlated relations, the agricultural development and the farmer net income, the efficiency of the RFS has the positive correlated relations。The short-term balanced relations are that the agricultural development and agricultural developments, the scale of the RFS of lags 2 to have the negative correlated relations, that the agricultural development and farmer net income, the scale of the RFS of lags 1 and efficiency of the RFS of lags 2 to have the positive correlated relations.(b) The scale and the structure of the RFS remarkably influence agricultural development, the farmer net income and the scale of the RFS remarkably affect mutually, the farmer net income remarkably influence the structure of the RFS, rural economy remarkably influence the scale of the RFS, the rural economy and the structure of the RFS, the agricultural development, the farmer net income, the rural economy and the efficiency of the RFS do not obviously mutually affect(c) The mutual influence process of the scale of the RFS and the agricultural development, the farmer net income, the rural economy is quite obvious and fierce, but the mutual influence of the structure & efficiency of the RFS and the agricultural development, the farmer net income, the rural economy is also quite obvious but quite weak. So the RFS of China is still in the preliminary development stage for optimizing its structure & enhancing its efficiencyIn addition, this article carries on the discussion one by one to questions functional localization, reform development of the Agriculture Bank of China (ABC) , Agricultural Development Bank of China (ADBC), China Postal Savings (CBS), the Rural Credit Cooperative(RCC) as well as the countryside folk finance ,simultaneously analyzes our country rural finance market system, the supervision system, the regulative system and the ecological environment system, outlines basic construction of the the RFS in China in a future, proposes a series of related opinions as follows states.(d) The further localization & reform of ABC must take improvment of the RFS's function as the starting point and the foothold, the transformation of joint stock system must follow the request of commercialization bank according to the rule of market economy, must give dual attention to the frail fundamental realities of the RFS of China, promote and strengthen the function serving for "San-Nong"Localization of policy-type bank in the tradition significance already could not by far adapt the request of time, fully satisfy the need of "San-Nong", cover the service of "San-Nong" to all domain of market malfunction, sharpen the ability of raising fund, realize the multiplication of financing channel. Looking from the function, CBS not only provides not to agriculture ,countryside as well as farmers with "ventilation blood transfusion", on the contrary, massive absorption funds from agriculture and countryside to non-agricultural production and city, intensifies the gap of supply and demand of countryside financing. Postal Savings mechanism for fund backflow countryside should be established as soon as possible in order to "takes it in the agriculture, with it in agriculture".This is the important task and the content of rural finance reform and the construction of RFS.The most major problem of Rural Credit Cooperative (RCC) a s main army of existing rural finance in China has ability of being too weak to displays "San-Nong", further deepen property right reform of RCC. The localization of target locates in"San-Nong", the service innovation is for "San-Nong"(e) The countryside folk finance plays the more and more important financing role in China rural finance system,its unique superiority lies in the "Effect of Social Interpersonal Relationship", it has "the Information Effect", "the Cost Effect", "the Mortgage Effect" and "the Prestige Effect" or "the Moral Effect", It suits for the economicly small and weak peasant household, the individual engaged in commerce and the small and medium-sized enterprise, enhances the range and the main body of financial service, achieve the place and the domain which the regular finance cannot achieve, developes the breadth and the depth of financial service.The Villages and Small Towns Bank—countryside's Community Bank, the community of it manifests in "the villages and small towns" , target client mainly for local farmer, agriculture and rural economy; The Loan Company-special Micro Credit organization which is to take counter-impoverished, presses the development as the objective credit way, the speciality of Loan Company is "not to save specially in only the loan"; The Countryside Fund Cooperation Society-corporate finance return, the corporate finance still has the broad market space(f) Because of the feeble constitution of agriculture, the weak trend of farmers, the weak area of countryside and the vulnerability of the RFS, more preferential and supported policies should be adopted to construct the RFS to sharpen the financing ability of RFS,alleviate the countryside financial strain . Strengthen the legislative and improve law enforcement to safeguard the creditor's rights security of the rural finance; Perfect the system of rural community credit to purify the credit environment of rural community; Establishes the countryside deposit insurance system to enhance the rural finance system stability so as to improve the rural finance ecological environment.