Study On Path Dependency Of China's Rural Financial System

Since the reform and opening up, China has made great achievement in agriculture and the development of rural economy and the ties between agriculture and countryside and national economy are becoming closer and loser. There are many factors which influence the development of agriculture, countryside and farmers. One important reason is that the current arrangements for the rural financial system can not meet financial needs of the main part in the rural economy. This means that the current arrangement of rural financial system in China restrains the deepening and development of the rural finance and limits financial needs of the main part in rural economy. Therefore, it is necessary to deepen and develop the financial reform in rural areas. Only in this way the issues concerning agriculture,countryside and farmers which is increasingly prominent can be effectively solved.In recent years,with the adjustment of the strategy of the state- owned commercial banks,the transformation of the function of the Agricultural development Bank and the deepening of reform of rural eredit cooperatives,the overall function of rural financial system has been weakened and the needs of the development of agriculture and rural economy cannot be suited.We must systematically innovate on rural financial institution to carry out financial deepening for financial restraint. Firstly, the rural financial infrastructure institution should be improved through establishing the mechanism of market competition, building risk-sharing mechanisms, establishing support system of national policy, improving the rural financial supervision system and other measures. Perfect foundation for the rural financial institution plays a supportive role in running the rural financial institution. It could improve the allocation efficiency of rural financial resource, reduce the risks of rural financial market and improve the earning ratio. Secondly, it is necessary to reshape the organizational system of rural finance. The rural financial organizational system is the infrastructure of rural financial system. Only the perfect financial system with mutual complementary functions and moderate competition can ensure the finance to play the role in the rural economy. While adhering to commercial reforms of the Agricultural Bank, we should actively develop and improve the financial organizational forms lacking in the rural financial market, including cooperative finance, policy-oriented finance, small and medium local commercial banking system, small credit and other forms of financial organization. It is necessary to develop the rural capital market and standardize and guide the rural informal finance step by step. Lastly, we need promote organizational degree of farmers'financial behavior. It is an effective way to promote the efficiency of financing in the rural financial market, since the systematism of farmers can make them be more rational and powerful. And farmer organizations can share the risk of their loans, enhance their credibility and improve their repayment ability. In current rural financial market, there are many farmer loan-guaranteed associations, mutual organizations of rural funds, financial institutions +leading enterprises +farmers, and other model of farmers'financial organizations. In the future, the government should play a constructive role in promoting systematism of farmers.