Research On Rural Financial Repression During Rural Economic Growth

Rural finance means all the financial activities that correlate with production in rural domain, such as absorbing deposits, providing loans, settling accounts, cash management and rural credit cooperation, etc. The construction of a good rural financial system will play an important supportive role in the development of rural economy and the adjustment of the structure of rural production.Based on the theory of financial development as well as the relationship between financial development and economic growth, after analyzing the progress of China rural finance development, this paper has researched the financial repressions in rural areas. These repressions are: financial dualism structure, malformed financial system, incomplete financial market, constrained interest rate. Positive analyses show that rural financial development plays a week and limited pole in the rural economic growth, whatever capital source or utilization. This confirms the existence of rural finance suppression further. There are two models of finance deepening. One is demand-following, the other is supply-leading. At last, this paper gives some advices for the next progress of China rural finance. We should build a new rural financial system, including Agricultural Bank of China, Agricultural Development Bank of China, Rural Credit Cooperatives and private finance organizations.This paper consists of seven chapters, which are preface, theory of financial development and economic growth, analyzing of rural financial repression, positive analyses of relationship between rural financial development and rural economic growth, progress of the deepening finance and conclusions.