China's Agricultural Policy Bank In The New Strategic Transformation Functions To Adjust

Problems facing agriculture, rural areas and farmers are crucial to the reform and opening up courses and overall prospect of modernization drive in China.'finance is core to today's economy'serves as a vivid illustration on the supportive role rural finance is playing in the advancement of rural industry and that of building rural areas with Chinese characteristic. To date, China's social and economical development has reached a new level and the government will adopt a strategic policy of'industry nurturing agriculture, urban areas supporting rural areas.'China will promote its strength to support and protect agriculture.In recent years, with the market-driven reform of grain and cotton purchase structure, agriculture development bank of China(ADBC), with agricultural products purchasing as its core business, is faced with the large scale shrinking of its business scope and is challenged by the problem of its reposition. Hence, there are debates about the survival of ADBC and people came up with 4 solutions.(1) the closing of its business(2) to incorporate with agriculture bank of China(ABC)(3) to shift its functional business as a policy institution to other industrial banks and institutions(4) to restore and perfect its function as a policy institutionAs had been explicit explained by the central government in 2006's No.1 document on agriculture, it pointed out that'the advancement of rural finance structure reform','to reposition agricultural development bank's function and expand its business scope and its capital resources'. Basing on this, the author discussed the theme of ADBC's strategic transformation as a policy institution and the adjustment of its function.The author adopts the concept and researching methods from Economics, Policy Finance and Comparative Finance. To start with cases analysis, itincorporate with statistics and comparative analysis in reference to the agriculture policy bank's fundamental theories and the development courses ADBC had gone through as well as problems the bank had encountered. It focused on the strategic transformation of agriculture policy banks and the adjustment of their functions.The principal researching areas included: 1.Problems facing agriculture policy banks in China- the shrinking of business, the weaking of its functions, unbalance to asset balance restrictions, lacking in independent raise fund, shortage of capital resources, inappropriate credit structure, over centralization of capital allocation, soaring difficulties to run purchasing capital in a close-end enviroment, the rising operating risks and that of sustainable development. The author ventured to find out factors related from policy making, operating structure and systematic root. 2. Proposal on agricultural policy bank's strategic transformation (with a view to the experiences from agricultural policy banks abroad) 3. Taking China's economy and rural finance development into account, the author gives some food for thought on the market positioning of China's agricultural policy bank in the new situation. It covers business development principles, loan supportive items, bringing into full play agricultural policy bank's main body function and that of external environment. It brings forward its main business direction and areas to expand credit services. Besides, it also gives some advice on how to strengthen and perfect agricultural development bank's functional active mechanism.