Study On The Legal Regulation Of Chinese Rotating Savings And Credit Associations

The rotating savings and credit association(RACA) in eastern culture is a special non-governmental coorperative finance organization established based on the interpersonal relationships, genetic connections and the local circumstances of a rural society. In a traditional rural society, villagers satisfy mutual needs by getting money from the RACA, buying living and production materials and preparing for weddings and funerals. The RACA functions relying on the social insurance system to avoid the risk of breaking down. After the reform and opening-up policy, the RACA became popular again in the south-eastern coastal area, especially in Zhejiang, Fujian and Guangdong. As a part of non-governmental finance organization, the RACA offers an alternative financing channel for middle and small-sized enterprises and peasants as a replacement of regular financing channel. Compared to traditional RACA, the association in the new era has the following new features. From the perspective of member composition, the association is experiencing a historical transformation from the internal side to the external side, the genetic and geographical connections between members fading and member amount increasing; from the perspective of organization form, new RACA patterns appear, such as the RACA whose members are other RACAs rather than individuals, and the RACA whose members offer the finance in turn; from the perspective of interest, the mutual coorperative function of the RACA is weakening and the function of beneficial investiment emerges. Some RACAs have required high financial interests. The traditional pattern relying on members' social relationships can no longer be suitable to new RACAs, the collapsing risk of which facing a sudden increase.This article studies the RACA system on three aspects. Firstly, the article studies how the just and benefit value of Confucianism influences the trust, and how the trust provides a behaviorial basis for social capital. Secondly, the article discusses about how RACA, a typical non-governmental finance organization, is more reasonable than regular financing organizations. Finally, the article points out the legal hole of RACA contracts and describes how such legal hole is supplemented by habits. Based on the theory that "law should be a reflection of racial spirit," this article tempts to typicalize RACA contracts, regulating the legal relations between RACA members, and distributing each member's responsibilies after the RACA's breaking down to dicrease the risk.The article is divided into three parts. The first part introduces the general information of the RACA, including its history, conception, functioning regulations and features. The second part introduces the reasonability of the RACA, and the risk of the RACA from the perspectives of member composition, organization form, economic function, RACA finance application period, and the RACA financial interest. The third part focuses on the legal hole of RACA contracts, discusses how habits supplement the legal hole, and explains the inner legal relations of the RACA under the aim of regulating the RACA system.