China's New Rural Finance Organization Development Research

Since New China was founded in1949, the reform of our country’s rural financehas gone well in general, and the rural financial organization has developed rapidly.However, with the reform of the rural finance deepening, some contradictions aregradually highlighted. These contradictions mainly reflect in three aspects: one aspectis that there is a wide gap on the distribution of financial resources and the level offinancial services between urban and rural; Another aspect is that the ability of capitalsupply and the area of financial business is limited; The third aspect is thedevelopment of rural security institutions has fallen behind. In order to alleviate thesecontradictions, on December of2006, the China Banking Regulatory Commissionissued the90th document, this document had given many suggestions on relaxing thepolicy limit of rural financial institutions on banking. During these suggestions, thereis a specific suggestion on how to set up new rural financial organization, thedocument also had suggested that the country should start a pilot project of this neworganization. From a theoretical point of view, doing research on the development ofnew rural financial organization is not only enriching the development theory of ruralfinance and rural economy, but also doing the preliminary exploration on institutionalchange theory of rural finance. From a practical point of view, doing research on thedevelopment of new rural financial organization is a important practice on the field ofrural finance, this practice reflects the Outlook of Scientific Development. Thispractice is not only to activate the market of rural finance and to offer new ideas toalleviate contradiction of the rural fund supply and demand, but also to accept therural idle capital, so we can make the investment of rural economic development andnew countryside construction better. Therefore, this thesis will study thedevelopment’s problem of new rural financial organization.From the qualitative point of view, this thesis mainly studies on the developmentof new rural financial organization, while using the method of experience summary,comparative analysis, descriptive analysis. In the logical structure, the whole thesiscan be divided into five parts.The first part is called the introduction, we mainly introduce the paper writingbackground and meaning of the subject, framework of analysis, innovation and deficiency, and we also describe the relevant research results which include both thedomestic and abroad.The second part includes the first chapter and the second chapter, it focuses onhighlighting necessity of the development of new rural financial organizations and theconnotation of rural financial organizations. In order to study the new rural financialorganizations better, in the first chapter we evaluate the development of rural financialorganizations. By studying the developing process of rural financial organizations, wegive some reviews and summaries for traditional rural financial organizations, and wecan also find some existed problems of the traditional rural financial organizations.The author support that the reform of the rural financial organizations has notcompleted, the traditional rural financial organizations have played a low efficientperformance on serving for “three dimensional rural issues”. According to evaluation,we can conclude that the performance of new rural financial organizations is superiorto the performance of traditional rural financial organizations in three points, such asthe amount of the loan, financial infrastructure and uncertain factors. Therefore, whenwe are trying to improve the efficiency of the traditional rural financial organizations,it is necessary to develop the new rural financial organizations as its importantsupplement.On the second chapter, we do research on the new rural financial organizations’connotation, structure and characteristics. New rural financial organizations aredifferent from the traditional rural financial organizations, it mainly engages in creditpayment, recycling, currency circulation and its related financial businesses; As to thestructure, it includes the formal financial institutions and the informal financialinstitutions. Among them, the formal financial institutions is a main part of the newrural financial organizations; The basic characteristics of rural financial organizationsare serving for “three dimensional rural issues”, creating on loosen conditions andhaving flexible corporate governance structure.The third part includes the third chapter and the fourth chapter, the main contentis to introduce the theoretical foundation and realistic basis which can be learned bythe development of new rural financial organizations. The third chapter introduces thebasic theories which support the development of new rural financial organization,including the financial repression theory, the financial deepening theory, the ruralfinancial market theory and the theory of rural financial system. The fourth chapter introduces four kinds of rural financial organizations and their developing modewhich can be learned by us. In this chapter, we mainly study developing mode of fourcountries’ rural financial organizations, these four countries are The United States,Japan, Germany and the Bangladesh. Through learning from these four countries, wecan explore new rural financial organizations better.The content of the fourth part is from the fifth chapter to the seventh chapter, andits content mainly discusses how to develop rural financial organizations. It is the keypart of this thesis. The fifth chapter explores general framework of new rural financialorganizations’ development, including the overall goals, basic principles, main tasksand key work for development.Based on the fifth chapter, this thesis makes specific analysis for the sixthchapter and the seventh chapter. For the sixth chapter, after studying the situation ofall kinds of new rural financial institutions’ pilot project, we can find someindividualized problems that appears from practicing pilot project. Then we concludethe common problems of these different kinds of new rural financial institutions,including the sources of organizations’ funding constraints, profit-making weakensthe strength of supporting agriculture, the size of the organization is difficult todetermine, and many employees aren’t qualified for their job. To solve all theseproblems, we can take measures as follows: Firstly, in order to enrich the new ruralfinancial organizations’ financial strength, we can broaden the sources of the capital;Secondly, we develop the organizations in a relative reasonable scale; Thirdly, fullycoordinate the contradictions between character of profit-making and character ofworking for the public. On the premise of ensuring the goal of supporting agriculture,we try to maximum the organizations’ operating profit; Fourthly, we take measures toattract talented people to join the new rural financial organizations.The seventh chapter explores China’s new rural financial institutions’ developingmode. As for the village bank, we study its developing mode in three dimensions: theinvestment of financial capital, financial business innovation and the scale of financialinstitutions’ development; As for the rural financial cooperative, we study itsdeveloping mode in two dimensions: the participation of external economic subjectand rural financial cooperative itself; As for loan company, we put forward two kindsof developing mode. One is called quantity mode, another is called quality mode.While studying on new rural financial organizations’ internal cooperation mode, we put forward that the village banks, loan companies and rural financial cooperativesmay cooperate with each other. By using this developing mode, we can give full playto strong points and serve “three dimensional rural issues” better.The fifth part refers to the eighth chapter, we mainly study on how to create thesupport system of new rural financial organizations, this support system is discussedon three points. The three points are called guarantee system, supervision system andpolicy system. As for the construction of guarantee system, we mainly discuss thebasic content of guarantee service system, including the development of agriculturalguarantee institutions and agricultural insurance. As for the construction of thesupervision system, we put forward that old system restriction should be broken bynew rural financial organizations, and its specific work is building a new systemwhich is helpful to “three dimensional rural issues”; Adjusting the registered capitalsystem of new rural financial organizations; Improving the supervision system whichtake the external supervision as its major supervision. As for the construction ofpolicy system, we focuses on the analysis of policy system which will promote thedevelopment of new rural financial organizations, including fiscal policy, monetarypolicy and local government supporting policies.On the basis of the previous research, many efforts are made on some innovativeresearch. We are trying to sum up all kinds of new rural financial institutions and theirexisting problems, and to put forward the countermeasures how to solve theseproblems; Based on learning from international typical rural financial organizations’developing mode, we are trying to explore on new rural financial institutions’developing mode; In order to promote the development of new rural financialorganizations, we also attempt to build three security systems, they are calledguarantee system, supervision system and policy system. However, the developmentof new rural financial organizations of is a difficult problem in the field of ruralfinance. Without corresponding case analysis and model prediction, this thesis mainlydoes qualitative research. In such case, we need to do further research in future.