China Property Right System Reform Of Rural Cooperative Financial Organizations And Development Research

Since the reform and opening in the economy, the national economy has taken great development; but, on the other side, China's economic development is not harmonious, the character of "dual economic structure" has been very obvious. Especially in the medium & upper-term of 1990's, the issue of "Agriculture, Rural and Farmer" has become a most important problem puzzling China's economy. Finance plays a great role on economic development. Rural finance depress is one of the important factors which restricts rural economic development. As one of the most important rural finance supplier, the reform of the rural credit union has been the emphasis in the rural finance reform. But the outcome of the reform has deviated from the beginning propose far away. People cannot agree on the problem that which institution of property rights the credit union should select.Based on the case mentioned above, after analyzing the cooperative theory and other country's experience, this paper tries to find out the institution defect which exists in Chinese agriculture credit union and why the defect exists; consequently, we can find out a way to reconstruct Chinese agriculture cooperative finance's institution of property rights.The institution of property rights of the credit union is due to the government's "preference of dualism". It is impossible for the credit union to set up truly cooperative finance group by the reform led by the government. It shows from the empirical study that the credit union neither has the advantage as a cooperative finance group nor makes a good profit as a commercial group. By game theory, the paper proposes that the institution of property rights of the credit union is only an inefficient equilibrium in the game between the government and the farmer. The only way to change the inefficient equilibrium and get a Pareto optimality is to change the government's pay function. At last ,the paper draws a conclusion that china's rural area must cultivate wholly new cooperative groups under the cooperative rule by the help of the rural credit union's resource support, so as to get benefits from each other.