Research On Financial Exclusion Of Rural China

From the party's after the third plenary session, with "three steps" strategy whichwas putting forward by Deng Xiaoping going on, China's economy has been in highspeed development stage, the national economy and the quality of life has improvedinto a high level. But as the city modernization transformation, the gap between ruraland urban economic is on the increase. The problems of China's urban and ruralduality of economy is more and more obvious. The economy of urban and ruralduality also led to the urban and rural financial development be not consistent. Creditrationing and information asymmetry of China's rural financial developing has alwaysbeen there, resulting in the Chinese rural financial exclusion of the realistic situation.The development of rural economy, solving the problem of rural financial exclusionand finally achieve the integration of urban and rural economic development inChina's current economic development is an important issue.This paper attempts to unlock the financial exclusion, through reading extensivedocuments and analyzing the current situation of the development of urban and ruralfinance, to find out the current situation of China's rural financial exclusion variousrestricting factors.After recounting the research production described in the exclusion of domesticand foreign financial in this paper, Using of large amounts of data collected from thesecond chapter, the author illustrated China's rural financial exclusion status quo. Thesecond chapter is divided into two aspects to explain that China is in the seriousfinancial exclusion. The differences of Chinese financial development between urbanand rural, and regional differences. The embodiment of the urban-rural differences infinancial development, the paper illustrate the significant financial differencesbetween urban and rural from all banking financial institutions and rural creditcooperatives development as well as the development status of the new rural financialinstitutions. When financial main body chose the location of the financial institutionnetwork and financial service objects, rural residents have been excluded from theservices. Regional differences of China's financial, from the threshold test ofmeasurement instruments to measure the differences between China's three majoreconomic local threshold, to illustrate the financial exclusions have existed in Chinadifferent levels of economic development. In the third Chapter of this thesis, a rational analysis has been developed to findout the fundamental causes of which effect financial exclusion in China in four of themost crucial aspects, including the income effect, the Threshold effect, the Systemeffect and the politics effect. Various factors have jointly decided financial exclusionin rural China. Firstly, because of the seasonal nature of the agriculture production,most rural residents do not have steady income as well as fixed assets that can be usedas mortgages. Therefore, they as applicants cannot meet the standard of the financialinstitutions for granting loans.Secondly, majority rural places located in the mostremote areas, which decides the lack of infrastructure in a large number of villages. Itwill invest plenty of human, material and time resources to offer financial services inrural area.What is more, the general low education level in rural areas has decided therare acceptance of the financial production. On the other hand, the system of ruralfinancial institution needs further amelioration, for some of the staff lack theenthusiasm to offering their services for agriculture, rural and farmers.Last but notleast, government supports should be strengthened if it really wants to accommodatethe rural financial affairs. In conclusion, this thesis comprehensively summarize theroot cause of the financial exclusion in rural areas of China.Chapter4of article combined with the analysis of the reasons for the thirdchapter, and put forward corresponding suggestion of solutions. The first one is tospeed up the adjustment of rural industry, to promote the industrializationtransformation, and to develop the service industry, so that farmers can get a stableincome and to improve farmers' income level. The second is to innovate financialproducts, and set up the "three agriculture" evaluation method accord with thecharacteristics; Accelerating the construction of rural infrastructure and improve theoverall education level. The third is that,farmers financial institutions system arenot perfect. Some institutions and not really the three rural service and have the lackof competition and sustainable business capability. Fourth one is to increase ofChina's rural financial policy support efforts. With the above four suggestionsfundamentally puts forward to solve the China rural financial exclusion problemeffectively.