On Financial Capital Outflow In Rural Area Of Hebei Province

“Sannong” problem is a serious subject that concerns economic development of Hebei—abig agricultural province. At present, fund shortage has become the bottleneck in the course ofrural economic development. The main reason for this, besides the backwardness of economyand poor-accumulation of funds in rural areas, and less new infusion of funds from outside, isthat rural funds flow out through various channels, especially through rural financialinstitutions. This brings bad impact to the sustainable development of economy in rural areasof Hebei Province, so it is necessary to reduce fund outflow.This paper mainly studies rural fund outflow in Hebei Province from the perspective ofrural financial institutions. First, it analyzes deposit and loan data, and finds that either thefour commercial banks or the rural savings banks, which are both run in the way ofcommercial operation, or the rural credit cooperatives which are playing an important role inassisting agriculture, have all become “absorbers”. This seriously handicaps the sustainabledevelopment of economy in rural areas of Hebei province. Then the paper analyzes thereasons for rural fund outflow from the theoretical perspective. This paper holds that thefactors which lead to rural fund outflow are as follows: backwardness of rural economicdevelopment, weakening of the banks’ function of assisting agriculture and imperfect externalenvironment of finance. Finally, the paper briefly surveys foreign countries’ practice thatreduce rural fund outflow, such as the system of community reinvestment in America, Frenchagricultural credit banks with full functions, the risk prevention mechanism in Japan. Thepaper suggests that Hebei Province should borrow experience from these countries, such asrelieving contradiction between financial supply and demand and guaranteeing circuit offunds, and establish financial assisting-agriculture system, improve external environment ofrural finance and implement incentive financial and fiscal policies so as to lead funds back torural areas.