China County Banking System Optimization Research

County as an administrative subject appeared in the Chunqiu period, it is China’s mostbasic administrative unit, and it is a key point in the research of area theory, to speed up thedevelopment of county economy is to solve a series of prominent contradiction betweeneconomy and society, and ensure our country economy and rapid development. Finance is thecore of modern economy, has an important role for the development of economy. Regionaleconomic theory and regional financial theory has laid a solid foundation for the research ofcounty financial and banking development. The banking industry organization is the mainbody in the county financial system, occupy more than90%of the county financial assets. Itis the fund pool of county economic development, offer the county total investment scalewhich can be used for the economic development. So the good county banking system hasstrategic significance on our country’s economic development. The construction of the countybanking system is currently in the turning point. Then years ago, the state-owned Banks, as arepresentative of the financial institutions, decided to reduce cost, looking for betterdevelopment space, had withdrawn from large-scale county, the main business had ben put incenter city, that made the county banking system development imbalanced. In the21stcentury, with the development of county economy, banking institutions has payed moreattention on county market gradually, trended to set more branches in county. We should takethis opportunity to change the phenomenon of capital flowing to large and medium-sized city,which cause the county economy "blood loss", and improve the county banking system tosupport the economic entity.Foreign regional Banks or small community Banks support local economic developmentdeeply, especially supporting the small and medium-sized enterprise development has richexperience. The American community Banks have the typical regional character, in the basiclevel to support and service the micro enterprises of county, is an inspiration to thedevelopment of our county banks. We should draw lessons from foreign experience, and onthe basis of the analysis of the current state that is the rural credit cooperatives as the main body of county banking industry, the state-owned commercial Banks and the postal savingsbank for an important supplement of the situation, to discuss how to optimize the China’sbanking system and find the path. This paper argues that the main body of the county banksystem should be the community banks whose scope of business are the county. Based oncommunity Banks wich conform to our country county economic development, we shouldencourage all kinds of Banks play a role to support the development of county economy. First,reforming the rural credit cooperatives and the corporations of rural commercial Banks,conducting to county community banks, improve their management and the ability of serviceto the local. Second,encouraging state-owned commercial Banks, urban commercial Banks,shareholding commercial banks and urban commercial banks play advantages wich are highermanagement level, risk prevention and control ability strong, higher science and technologycontent, and leading the county banking system to a new level. Third, we should continue tosupport policy Banks play a role in agriculture sector.The key of Banking system optimization is to coordinate with local economicdevelopment, neither make the county economy losing blood, nor superfluous and produceinflation negative effect etc, thus the scale of banking system and economic development(main index for GDP) should adapt to each other. The wide range of China’s county, weshould according the eastern and west regions’ development to do the actual empiricalanalysis. This paper by our top100country’s economic development indicators and amongthe banking system development index as the foundation, analysing and building the bankingsystem quantification model scale which adapt to the county economy development.Thesehas important significance for the current economic and financial development of county.Quantitative county banking scale, make its control in county economy and adapt to currentstage, we could make county funds be full used and no waste.In China’s administrative system, banking system construction not only need the internaldevelopment, also want to have external guide and regulate to avoid vicious competition andmarket unclear level problems etc, so the banking system in the process of constructionshould carry on the optimization of external supervision system, which adapt to the reform of the banking system, county banking regulation system should be in the national bankingsupervision system and keep the same premise, and learn from foreign advanced experience,improving county banking supervision system, mobilize the enthusiasm of county all levelsadministrative units, to jointly maintain the county economic and financial development.County banking system construction is a systematic engineering, and not the simple sum offinancial institutions, it is necessary to further study the county market, set up bankinginstitutions layered, not only take care of key projects, infrastructure, the development ofagriculture, but also to consider more about the large number of small and medium-sizedenterprise, which absolutly have the important status in the whole economy, at the same time,we should improve the external environment for the banking system optimization,and tocreate the good conditions, in order to get good county economy development and promotebanking of booming development, better power entity economy development.