The Western Region Of Rural Credit Cooperatives Reform And Development Studies

The underdevelopment of economy decided that the Rural Credit Cooperatives (RCC ) should take on more social responsibilities. However, the statutes of the RCC decided its value orientation is the maximum of interest. This deviates from the original concept of RCC and the practical situation of economic development in western area. The proposal of "The Construction of Socialist New Countryside" politically promoted the rural financial development. And this will be helpful for people to anew recognize the problems of rural finance as well as helpful for eliminating negative influence for rural development caused by rural financial lag. The construction of new countryside should be a long course during which the government should play the role as a guide. The rural residents are the main body of this campaign and the promotion of their actions under the guidance of government needs extra support. In the case of financial ability limitation, banking support is the requisite part. Nevertheless, according to the actual situation of the county financial development of western areas, RCC surely will be the main part of rural banking support.However, RCC has been passive on the part of self-construction. For example, the problems of high trade cost and inability to control risk commonly exist in western areas. The academic and political circles have been disputing over the definition of RCCs nature without any conclusion. Besides, our country doesn't offer a stable and continuous policy to western RCCs. Due to the requirements in the document-Further Reforms of Rural Credit Cooperative Trials, which is proclaimed by the State Council, western RCCs are faced with the dilemma between beneficial and social orientation.In August, 2003, the States Council proclaimed the document-Further Reforms of Rural Credit Cooperative Trials, which decided the first group of 8 trial cities and provinces in total as follows: Jiangsu, Zhejiang, Shandong, Jilin, Jiangxi, Guizhou, Shanxi and Chongqing. In the August of 2004, the trial scope expanded to 29 provinces. At that time, western provinces all engaged in the trials except Tibet, such as Yunnan, Gansu, Inner Mongolia, Qinghai, Xinjiang, Sichuan, Ningxia, Guangxi and so on. Two years since the reform trials began, the western RCCshave got some improvements in self-construction; the property rights become clear, legal person administrative structure is improving, heavy historical burdens are decreasing, the quality of assets gets upgraded, and the dealing environment has been somehow improved. However, before some former problems are resolved, at the same time, a few new problems come up: dealing mechanism under the ministration of local government is not amplified yet, management power and responsibilities are not further clarified. Another problem is the ways and methods of unhealthy asserts stripping, the game playing between all parties' interests during the course of RCCs' share-holding system transformation.Does the western RCCs' reform have achieved its goal? Which is the real direction of development? There are many thesis and woks about the reform of RCCs and development research. The main research thoughts and opinions can be summarized into three major factions. The idea of the first faction is to stick to the RCC model under the cooperative system. They think that RCC hasn't realized the incipient conception of cooperative system, but looked at the perspective of cooperative system's aim, this model can give consideration to both social fairness and the negative influence which is brought by reversing market economy to rural finance. The idea of the second fraction is to develop RCC under the share-holding system. In 2001, Xieping published his thesis-The Dispute Over The System Reform of Chinese Rural Credit Cooperatives in Financial Research. He thinks that Chinese 50-year cooperative system is not cooperative system in real meaning. According to the current development environment, the author thinks RCCs don't have the qualifications to be real RCCs. Commercial banks of share-holding system are the best solution. The third faction's idea is to apply cooperative system or share-holding system in RCC according to local conditions and the development of economy. They think it doesn't matter to choose either of the two systems. What matters is whether it can better serve the market. They propose that it's suitable to apply share-holding system in regions with good economic condition whereas to apply cooperative system in underdeveloped regions.This thesis is trying to analyze deep on the part of the western RCCs' development history, financial and ecological environment as well as the state's support in policy and so on. Then I'll refer to the actualresearch statistics, (obtained in Eshan,Yi Autonomous County, Yuxi City, Yunnan Province and Maqu County, Gannan Tibet Autonomous State, Gansu Province) therefore to abstract western RCCs' status along with the problems, and in the end to offer some advice for their reform and development.The point in this thesis is that, the reform and development of western RCCs should follow the right direction, be practical and realistic in choosing developing pattern. The policy of RCCs' reform can be standardized. The western RCCs must be based on cooperative finance developing model. It is for the needs of the improvement of rural financial ecology in western areas, especially for the needs of western RCCs' development. The "Tianjin mode" is worth using for reference. Currently the western RCCs have a commercialized tendency. Consequently, the state should guide them on the policy part. Besides, the state shouldn't standardize the financial supervision. Since the financial environment there is difference between the east and the west, the starting point of supervision, ways and methods should be distinguished. Even if it is inside of western areas, the government should adopt a financial policy which accords with reality. Moreover, the state is supposed to aid the western RCCs to develop and promote the improvement of county financial environment. The construction of new countryside in western areas has more historical missions. The reform of credit cooperatives is rather a social than an economical problem. The aid increase shouldn't be at the price of RCCs transferring its controlling power. In the end, according to the current situation of rural finance in western areas, credit cooperatives ought to unite with Postal Savings Banks to promote the construction of rural credit system and then the improvement of financial ecological environment.