Research On Construction Of The Rural Financial System Based On The Functional Perspective

Rural finance becomes the core of modern rural economy. Though our rural financial system reforms several times and makes obvious achievements, there still exist a lot of problems that can't meet the rural economic and social development needs. While, previous practices give evidence that former reform measures conducted by institutional paradigm tended to neglect paying enough attention to the function of rural financial system, which would probably lead to deficiency and deviation from the oriental of the market. Therefore, how to build a rural financial system with full function, reasonable division of labor, property rights and effective supervision to adapt to the needs of a new socialist countryside construction is very nessecary to promote the rural economy by the rural financial.In a sense, the reform of financial system based on functional concept goes even beyond the usual institutional paradigm. In fact, financial function is more stable than financial institutes. With passing of time and variations of regions, the changes for financial function would be smaller than that of the financial institute. Besides, in the view of function concept, the functions of the financial institutes can't depend artificially on the governments and the governments can't determine its financial services and can't restrict the competition among the institutes. The functions of the financial institutes should be determined by the market and their core advantages. A financial institute can carry out a function or many functions and some function can't belong to the same financial institutes. So how to effectively match the financial institutes and the functions to improve the financial effeciency is a problem that must be solved for any financial institute's development strategies.This paper uses financial function as the research paradigm and the System Theory, Financial Function Theory, Agricultural Economy and Rural Finance Theory, with analysis of induction and deduction, Qualitative and Quantitative Analysis and Comparative Analysis as the research approaches, firstly, briefly sums up the history of our rural financial system and tracts down the evolution of financial functions; Following that, the paper gives a thorough analysis on the rural financial demand resulted from the building of new countryside at present; then, the article analyzes the current situation of the rural financial supply function and argues about the construction and the reform of the rural financial system, and makes clear the functions of the new rural financial system; at the basis of this, the paper systematically discusses the construction path of our rural financial system, and determines the composition of the rural financial institutions and their functional devision to supply new ideas and effective paths for the deepening reform of the rural financial system.The paper is made of 9 chapters. Chapter 1 is introduction. Chapter 2 presents the System Theory, the Financial Function Theory and the Structure Theory, and theoretically defines the rural finance at the perspective of function. It is the theory base. Chapter 3, Chapter 4, and Chapter 5 are the main part of the paper. In these chapters, the article firstly analyzes completely the features of the rural financial demand caused by the New Country Construction, and introduces the composition, evolution and activities in China's rural regular and irregular financial institutions in the dual economic structure. After that, the paper reviews function dissimilation in deploying the rural regular financial resources, the lopsided development of the rural irregular finance and the system causes of the shortage of function. Chaper 6 summarizes the typical patterns of the successful rural systems in the world and points out the worth of our lessons. Based on the researches above, Chaper 7 presents the thorough ideas and the development direction for the reconstruction of our rural financial system; Chaper 8 points out sysmetically the paths and policy suggestions for the reconstruction of our rural financial system at the perspective of function; Chaper 9 draws the research conclusions.The paper's main research conclusions are:(1) We know at the research perspective of function that: It is seriously defferent for the modern rural economy to need the financial resources; though there are many measures in the institute reforms, the inherent problems are not always solved effectively. At one hand, the agricultural development's demands for some financial functions can't be satisfied because of the lack of the path to achieve functions; at the other hand, some functions work overmuch because the finance is achieved overly by some path. The result must be that the efficiency in deploying the financial resources will be cut down. So, if the functions which the financial institues should bear are neglected, the reform's final goal must be neglected. To build a system offering financial functions is an important point in the financial system reform at the perspective of functional concept.(2) Quantitative analysis shows that: There is obviously and strongly positive correlation between our rural financial development and the economic growth, and the increase in the rural credit can advance the rural economy. So, the rural loans should be increased to promote the modern agricultural development and the construction of the New Country and to increase the farmers'income.(3) We think that through researches: Many defects in the present rural financial system don't result from whether intermediaries are dominant, but result from the governments'offside and absence. It is necessary to adapt and optimize our rural financial structure to make the function of the rural financial system work fully. We should select bank-oriented financial structure, develop strongly small and medium-sized financial institutions in rural areas, and coordinate the development of rural financial markets, meanwhile do well in the structure coordination for the rural financial service system.(4) Through comprehensive study, the paper puts forward the main framework to reform and resconstruct the function of the rural financial system. That is to say, the full-featured, orderly competitive, serving "three rural" and modern rural financial system should be built, with the rural policy finance as its orientation, commercial finance as its body, cooperative finance as its base and non-bank financial institutions and private finance as its useful complement. To achieve the goal above, the paper puts forward an idea that the fully functional rural financial system should be set up by two-step of short-term goals and long-term goals. At the same time, it is important to further strengthen the creation of the governments'regulation and control under the direction of function and to improve the competition mechanism of the rural financial market. Thus, the functions of the rural financial system can work well in a good system and mechanism and market environment.