Research On The Objectives And Performances Of The Rural Financial Policies In China

The gap between countryside and city is not only reflected in the dual structure of economic, but also reflected in the financial industry development level. Due to natural features such as high risk and low income, commercial financial institutions are reluctant to entry and expand the market in rural areas. Therefore, in order to encourage the development of rural finance and shrink the rural financing gap, the government carried out a series of policies and measures. The past literature is usually about a particular aspect of the policy or the impact on the rural economy. But there are very few researches for the purpose of the policy.On the basis of summarizing domestics, the targets and performances of rural financial policy in our country are researched in this paper. The whole paper includes several parts such as the theoretical foundation and main tools of policy, policy targets and influencing factors, the empirical research and so on, and it uses several research methods such as the integrated use of theoretical analysis and practical analysis, the combination of normative analysis and empirical analysis, qualitative analysis with quantitative analysis and so on. In the process, this paper analyzes the macro to micro factors influencing the policy objectives. And the micro influence factors are integrated for eight modules. Combined with the rural economic development stage, three paths to complete policy objectives are put forward, and the advantages and disadvantages of each path are analyzed. According to our country’s administrative efficiency, rural financial institutions efficiency and farmers’ knowledge level, the paper explores China’s current module combination.The empirical research is divided into policy performance and the relationship between two objectives. According to the policy tools and anticipated targets, empirical research uses variable structure co-integration models. Empirical, first, there is a long-term proportion relationship between the policy objectives and policy tools. Second, relative to other policy tools, the largest and the most significant contribution is the public finance. Third, the Agricultural Development Bank of China does not play a part in the rural financial supply. Forth, tax incentives for financial institutions causes the unfair competition, but not conducive to the increase of the rural financial supply and rural economic growth. VAR and impulse response are used between the two policy objectives of the rural financial supply and rural economic growth. And we found that the level of rural economic growth has a more impact on the whole financial system and the rural financial supply level is more sensitive to the impact of the economic variables.There are several suggestions being put forward through the analysis of the performance of rural financial policy:First, pay attention to the use of multi-policy tools to avoid relying on public finance. Second, promote the reform of the Agricultural Development Bank of China, expand the scope of business of the bank, and improve internal efficiency. Third, make preferential tax measures of financial institutions carefully, and pay attention to the universality and standard. in this way, we can avoid of unfair competition. Through the analysis of the relationship between the policy objectives, we found that because the achievement of the economic objective will be conducive to the other objectives, we should focus on the objective of development of rural economy. And also, we found that it is useful to take appropriate measures to stimulate the growth of the rural financial supply level.