| Since7th,2003, The People’s Bank of China taking the lead to push a new reform on Rural Credit Cooperatives. According to a file named "The Notice of Deepening Reform of Rural Credit Cooperatives(RCC)",this reform aimed on pro-viding service to agriculture industry and peasantry all around rural districts, ad-hered to market orientation in the reform. The notice proposed an overall require-ments including clearing property rights, strengthening the constraint mechanism and service function. In addition, the State would support appropriately, while lo-cal governments should be responsible. In this reform, the central and local gov-ernments both invested huge amount of money. By this means, both sides endea-vored to progressively improve management system and the reform of property rights, then promoting the internal control of RCC, Improving operating mechan-ism. Step by step, RCC can be a local community-based financial enterprise which has the right to self-operate, self-constraint, self-develop, and have the ability to undertaking corresponding risk by itself and supply financial service to agriculture industry and peasantry all around rural districts.Sichuan province also start to reform in8th,2004.Through eight years, RCC of Sichuan made some important progress and initial results. For example, the en-hanced capital strength, smooth payment course of RBC special bills for RCC, substantial decline in non-performing loans, general increases in profitability. This reform called "spending money on a mechanism" seems to have gained some pol-icy effect. It is so important to realize the fruits and problems over the eight years.As the RCC reform impetus came mainly from the central bank’s financial support, the main means to complete the reform is by setting the threshold of fi-nancial support, pushing RCC to participate in the reform with enthusiasm, super-vising RCC improving the governance mechanism and operational performance. Decentralization of management rights of the RCC to local governments, made it born some reform costs. Overall financial support was given by both central and local governments, so that the RCC could successfully ride out the storm to com-plete the task of reforming.At that time, there were four types of the central concessions, including: pre-serving and increasing subsidies, tax breaks, financial support and interest rate support policy. After the start of the reform, the local governments at all levels gave all kinds of support, including the establishment of the operation and man-agement of the provincial association of rural credit cooperatives to provide guid-ance and counseling sevices, direct injection, help collection of non-performing loans, financial support and tax breaks, the cash capital stock dividends subsidies or expansion of RCCassets directly by the form of donation. All these means aimed to help solve the historical burden of RCC.Reform till today, has taken the initial results. Since August2003,the new round of reform of RCC in Zhejiang and other provinces and cities firstly, so far, a total of30provinces(autonomous regions and municipalities),have participated in the reform. According to actual local conditions in a timely manner, the pilot provinces choose the approriarate reform mode by themselves, and to further ra-tionalize the relationship between ownership and improve the RCC.But in the reform process, challenge and controversy on RCC did not stop, and with the urgent need of the central bank funds of the RCC, local governments, and other interests of the body, RCC’s initial absence of ownership further eva-luated and became the formation of the deep-seated problems, such as problems in "three committee, one layer" governance structure. The provincial association model need further reform, while the asset quality of RCC need further verifica-tion.The new institutional economics about motivation theory of institutional chage can explain, to a certain extent, the motivation of RCC reform. That is the imbalance between the supply and demand of system; Douglass C.North deduced path dependency theory, which can help us understand the situation of RCC reform.In this article, we will look back to the efforts on reform, and try to find why and how we have to spend money on a mechanism. With some cases, this article analysed some problems, difficulties,initial gains and some effects in this reform and tried to through new perspective to understand the significance of this reform. This article have7parts. In Chapter l,the introduction mainly described the background and significance fo the last round of RCC.Gerierally introducing some related research papers written by domestic and foreigh scholars and proposing the general idea of this article and research method. Chapter2describes the institu-tional change of path dependency theory and the revelation of the RCC reform. Chapter3,a review of the history of China’s RCC reform and defects, summarize the initial results obtained so far of RCC reform, and there are still some flaws in the process, paving the way for the analysis of "path dependence" in the reform of RCC. In Chapter4,by reference to the relevant data, analyzing China’s rural economy and social conditions on the eve of the last reform, clarifying the main motivation, objectives and characteristics of the last round of reform in China. Chapter5analyze the status quo of RCC in the reform. Chapter6to analyze the reasons for the formation of path dependence in China’s RCC reform. Chapter7introduce some recommendations on how to break through the path dependence.This paper, with combination of path dependence theory, entatively analyzed some problems in RCC reform. The purpose of this paper is to combine the results of previous studies, theory and reform practice. However, in view of the shallow-ness of knowledge and lack of experience, there are many deficiencies and one-sided text certainly. Welcome experts and scholars’criticism, and I will work to continue to learn more, to explore more. Thank all teachers for reviewing this paper. |
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