The Development Of Rural Cooperative Financial Problems And Countermeasures

In modern market economy, the economic development can not be made without the financial support, and the economic development in the countryside needs the rural financial support as well. The Credit Cooperative in the rural areas, arranged officially by the system as the principal part of the cooperative finance in the countryside, has become a financial organization with its own characteristics after over 50 years of development. But the Credit Cooperative in the rural areas has lost step by step the characteristics it should keep ever since its establishment as its administrative system has been changing so frequently, and especially, as it has followed the managerial model of the Agricultural Bank of China in the past 16 years after the People's Bank of China entrusted it to the Agricultural Bank of China to serve as its acting administrative body. It has developed into an organ of the Agricultural Bank of China at the grass-roots level, working against its former intention. In order to bring its role in supporting peasants, agriculture and rural economic development into further play, theorists and practicians have done much to probe into the deepening reform of the Credit Cooperative in the rural areas. The Resolution on the Reform of the Rural Financial System made by the State Council in 1996 demands that the Credit Cooperative in the rural areas be reformed by degrees into a cooperative financial organization in which peasants are the shareholders, and which is run by the commune members, and which serves mainly the shareholder peasants, thus renewing its cooperative nature. However, because this reform lacks full theoretical preparation, there is a big gap between the demands in the resolution made by the government and the present situation of the Credit Cooperative in the rural areas, and these decisions are far yet from meeting the everincreasing needs of the rural economic development for the cooperative finance. The reform of the Credit Cooperative in the rural areas is still in difficulty although Chinese government and the departments concerned have made great efforts. It is too much formalism that prevents it from achieving its goal. Therefore, it is reasonable to believe that applying financial principles and related economic theories, a serious study on the cooperative finance of the rural areas will be not only of great theoretical significance, but also of tremendous practical significance.The article focuses on the Credit Cooperative in the rural areas. Financial principles and related economic theories are applied. The progressive course of the cooperative finance in rural areas in China, the developments and changes the cooperative financial organizations have undergone, and the theories and practice on the cooperative finance serve as the background. The cooperative financial practice of the modern market economy countries is referred to. Positive and normative analyses and comparative studies of the development of the cooperative finance are made so as to research theoretically and practically on the development of the cooperative finance in rural areas in China, and to establish a model suitable for the development of the cooperative finance in rural areas in China.