Study On Diversity Of Rural Credit Cooperative's Ownership Pattern Choice

The topic of this paper is to discuss the standard of rural credit cooperative's (RRC) ownership pattern choice and to verify the diversity of RRC's ownership pattern choice both from theoretical aspect and practical aspect.As the main force of China's rural finance, RRC's operating condition and results not only affects RRC's development and marketing competition strength, but also affects the disposing efficiency of rural financial resources as well as rural economy. Furthermore, it is also related to the fulfillment of"New Country Construction"goal.With the reform started in 1996, some achievements have been made in this process. But there still exists several defects, such as operation inefficiency, ownership disorder, huge inferior assets and so on.On June 27, 2003 the State Council of China enacted"the Exploratory Plan of Deepening the Rural Credit Cooperative Reform". The plan indicates that there are mainly three kinds of patterns of RCC's ownership: Cooperation, Shareholding Cooperation, and Shareholding. Various patterns have respective characteristics and have different conditions and requirements towards the RCC. In view of the different degrees of economy development in different areas and the different operation conditions of the RCC, the reform should not be confined to just one pattern.Regarding the reform of RRC's ownership is always the core point of RRC's reform, most important thing is to decide which ownership pattern is more suitable for RRC. So this paper will discuss this topic in the following five chapters.First chapter is to introduce the basic concept and to give a comment on the domestic study situation of this area. And then illustrate the study route of this paper.Second chapter is to analyze the issue. First, analyze the three main ownership pattern's respective features, advantages, shortcomings and suitable range. Then, analyze the importance and necessity of RRC's ownership pattern choice. What's more, what is the standard of RRC's ownership pattern choice is what to be discussed in this chapter. The first principle of choice is"future return must exceed future cost". It is also the principle of the decision behavior between government and RRC's"Gamble Game"in the third chapter. And the specific standard of choice is"take actions that suit local circumstances", which means that we should choose the most suitable ownership pattern according to different RRC's operation situation and different district economy development situation in order to make full use of every pattern's advantage. Last, put forward the determination standard of the validity and rationality of a certain ownership pattern choice——to see whether the operation results of RRC and the service to"Agriculture,Rural areas and Peasantry"are improved or not.Third chapter is to use the theory tool"Game Theory"to analyze the decision behavior and outcome between government and RRC facing to the choice of ownership pattern. It is assumed that government wants to carry out cooperation system in order to provide better service to"Agriculture,Rural areas and Peasantry". But RRC will probably resist this policy in order to protect some existing benefits. So the two sides will get mixed-tactic balance when their benefits are both maximized. Therefore, every ownership pattern should not be carried out by government forcefully. It is the outcome of the"Gamble Game"between government and RRC. This can provide theory proof to the diversity of RRC's ownership pattern choice.Fourth chapter is to give practical proof to the main point of this paper. I choose a typical case for every pattern respectively, Tai'an RRC for Cooperative; Zhangjiagang, Changshu, Jiangyin rural commercial banks for Shareholding; Yinzhou rural cooperative bank for Shareholding Cooperation. I analyze the reason why to choose the pattern, the reform measures, the operation results of RRC and the service given to"Agriculture,Rural areas and Peasantry", using the following index, rate of inferior assets, ROA, ROE and so on.Last chapter is the supplement of the topic, to give specific suggestions to the different district and different situation of China's RRC, and try to introduce the new pattern——village(town) bank.