Western China Rural Financial Repression To Financial Deepening

Finance is the core of the modern economy, and it is the most important strength which supports the development of the western rural economy. But the Current rural finance system is suppressed, it exists many unwell factor blocking the rural economic. The result is a vicious circle, namely "finance repression". It has very important theoretical and practical meaning for the development of western countryside economic to analyze the present situation and the reason of the western rural finance repression, and explore the mode and the path the western rural finance deepening.Based on the theory of deepening finance and restraining finance, this paper analyzes the developed history of the Chinese rural finance and points out Chinese rural finance following the government's need. The regular financial organizations and irregular financial organizations constitute the present situation of western rural financial system. This paper analyzes the western rural financial repression from several angles. Firstly, this paper analyzes the performance of financial repression. The rural financial market is separated seriously, which presents obvious dual structure. The financial price can not present the real supply and demand of the fund. Low rate and high inflation exists simultaneously, lots of rural funds flow away. Secondly, this paper analyzes the economybasement of financial repression. Thirdly, this paper analyzes the reason of the western rural financial repression from supply and demand angles. One is supply financial repression caused by insufficient supplies of financial organizations, one is demand financial repression caused by effective demand of western countryside, and another is constructive financial repression caused by asymmetrical finance supplies and demand.There are two models of finance deepening. One is demand-following; the other is supply-leading. At last chapter, this chapter gives some advices for the next progress of western rural finance. Firstly, the rural bank system should be deepened. The reform of rural cooperative should be guided with rural financial demand, the agricultural development bank and agricultural bank should be encouraged to support the development of rural economy, the fund backflow mechanism of postal savings should be established, so that a multi-level and multi-purpose financial supplies bank system can be established. Secondly, irregular financial organizations should be guided correctly. The market entering and the market withdrawal mechanism should be established, which can make the irregular financial organizations standardized and legalized. At the same time, the government should strengthen the supervising of financial organizations and lessen the intervention of the financial organizations, or the folk finance will losesome advantages such as nimbleness and convenience. Thirdly, the securities and insurance organizations should be increased. Fourthly, the rural rate market should be advanced, which can supply a good financial ecological environment.