China's Rural Financial System Development Problems

Since the implementation of the policy of reform and opening-up, China, with its high-speed increasing overall national strength, has achieved great success on national economy. Therefore, the rural economy, as well as rural finance system, which serves as its backbone has also seen tremendous improvement, for example, the rise of the absolute amount of loan and deposit and the high coverage rate of rural finance institutions, all of which contribute a lot for the development of rural economy. However, in spite of these, there are still many limitations in our rural finance system, and many problems have emerged during the process of the implementation of the policy of reform and opening-up. All these problems have hindered the sustainable and healthy development of our rural finance, and hence restricted the development of rural economy.After thinking over and analyzing the current situation and limitation in rural finance system, we can enhance the promoting effects of rural finance towards the development of the rural economy by reforming the rural finance system and solving the problems that exist in the rural finance field. What's more, as the problems about Agriculture, Rural areas and Peasantry attracts more and more attention, through the means mentioned above, we can also make the rural finance system more effective in accelerating the prosperous process of peasants, rural areas and hence agriculture, which means those methods can be considered as a key to open the door of the problems about Agriculture, Rural areas and Peasantry. Based on the current situation of rural finance system, this thesis puts forward the suggestion of this system reform by summarizing and analyzing the experience of all our country's previous rural finance system reform, and by using the experience of abroad reform in this field for reference.This thesis is divided into four chapters.Chapter one is the presentation of China's current rural finance system and the analyses of the existing problems. Only by knowing the actual situation of China's rural finance system, and hence analyzing and summarizing on this basis, can we find out the scientific and reasonable reforming path. This chapter is mainly the introduction of the overall structure of China's rural finance system and the developing situation of the formal and non-formal finance organization in China's rural area. What's more, it also expatiates and analyzes the mainly current -existing contradiction and problems.Chapter two is the retrospect and evaluation of China's rural finance system. This chapter reviews the reforming history of China's rural finance system, introduces the starting point of the previous reforms policies, presents previous issued policies and the effects they have gained, analyses the reasons why the previous reforms couldn't achieve the ideal effect, and summarizes the lessons that the future reforms can use for reference. All in all, the distempered ness of our rural finance system is due to the incorrectness of reforming mode and method. China has always strictly controlled the admittance of rural finance institutions, which induces that the most of the existing rural finance institutions are exogenous. So, it can be said that it is the government that leads to the rural economy's lacking of initiative participation which results in the inconsistency between supply and demand. Therefore, we can get the conclusion that our rural finance reform must get rid of the previous way which means that the reform should not start from upper level to lower roots but the reverse. What's more, we should also turn our attention from rural finance supply to rural finance marketing institution and rural finance demands, by which we can scientifically and reasonably reform China's rural finance system under the direction of rural finance demands.Chapter 3 is the retrospect and analysis of the developing process of rural finance system abroad. No matter developing countries or developed countries, all have the cases of success and failure during their rural finance system reforming process. This chapter respectively introduces the successful experience and unsuccessful lessons of both developing ones and developed ones, and points out the merits which can be taken advantage of by our rural finance system reform.The last chapter, combining the current situation of rural finance system in China with the experience and lessons of previous rural finance system in both China and abroad, puts forward the suggestions for China's current and future rural finance system reform. Our current rural finance system reform should involve not only mobilizing the enthusiasm of related economy units in both country and town, but also constructing the favorable rural finance environment, enhancing the managing efficiency of formal finance organization and regulating and directing the development of informal finance organization. Only by these, can China's rural finance system be more suitable to the demands of the rural area, and be better serve the harmonious development of rural economy society.