Quantitative Analysis Of China's Rural Financial System Reform

In recent year, the agriculture and rural and peasant problems are puzzling the stable harmonious development of our country economy and society. Rural finance, which is as a part of our country finance system reform, is very important to improve and solve those problems. Firstly, this paper makes a brief review about the modern finance development theory and the rural finance development theory, then does a qualitative analysis referring to reform course of our country rural finance system and its present situation, then quantitatively measures the rural financial repression based on FIR, finally, takes the rural economy growth and the peasant household income as reference variable, empirically analyzes the ultimate factor behind the rural financial repression, and makes conclusions as follow: our country rural financial repression mainly concentrates in the rural finance system arrangement, such as the weakening controlling power of macro-financial supporting for agriculture,interest rate controls,credit ration as well as the active folk finance as a result of insufficient supplies by regular finance and so on. The roots of all of those lie in government top-down compulsory reform and neglecting micro-governance mechanism. In view of these conclusions, the author finally proposes some policy suggestions for eliminating the rural financial repression. On the one hand, we must improve the external condition of rural finance, including perfecting the environment of macro-economy controlling, creating good political basis, and speeding up the interest rate liberalization; on the other hand, we also must optimize the internal structure of rural finance. Finally, the purpose is to set up a multi-organized,multi-level rural finance service system, which is composed by the bank financial institutions primarily, non-bank financial institutions for assistance.