Comparative Study Of The Rural Financial System Between China Mainland And Taiwan

The State Council promulgated No.1 Document focused on “three rural” issues, a series of policies related to agriculture, which made further deployment for improving rural financial service system on the New Term at 2016. With the attention of rural issues, the rural economy of Chinese mainland has made significant progress. Meanwhile, the rural financial system to serve the rural economy has also been considerable development. At the same time, a good rural financial system can promote agricultural development, farmers’ income and improve living standards in rural areas. Therefore, the reform and development of the rural financial system is directly related to our ability to solve the "three rural" problem fundamentally. Throughout the development of agriculture in Taiwan, the highly developed agriculture is not only benefit from the advanced management experience and technological advantages, but also closely related to the improvement of agriculture and its financial system. Agricultural financial system of Taiwan is one of Asia’s successful model of rural finance. It has a great significance for China to solve the "Three Rural Issues" on agricultural finance in Taiwan in rural financial institutions, legal systems and practices related to rural credit guarantee regime.This paper elaborates on the status quo, reform, the legal environment and so on of the mainland and Taiwan’s rural financial system. Meanwhile, this paper analyzes framework for the Chinese mainland and Taiwan rural financial system and the ongoing construction of rural financial system. For example, the overall structure of the status quo in Chinese rural financial system, the development of Chinese formal and informal rural financial institutions, the actual effect, the insufficient rural legal system, then the analysis of the existing problems of rural financial system; the evolution of the special framework for Taiwan rural financial system, the operational performance of the main financial institutions in the secondary system and the revelation of Taiwan’s agricultural financial system. It is important to find suitable for the construction of rural financial system by comparison.This paper aims to contrast the Chinese mainland and Taiwan, which can comparatively analyse institutional change, organizational characteristics, operation mechanism from legal environment, economic bases, rural financial institutions as well as the agricultural insurance system, etc. We can find the otherness of cross-straits reform and development and strengths and experience to actively promote the development of agricultural finance from Taiwan agricultural financial system. We can learn from Taiwan in the construction of the rural financial system and the legal system of market experience, combined with the actual needs of Chinese rural finance, then sum up some recommendations which can have great value of the Chinese mainland under the new rural financial system. These recommendations include: Firstly, to accelerate rural financial legislation and establish rural financial regulatory system; the second is to build the system of agricultural credit insurance and the insurance industry to promote rural development; the third is to improve rural financial institutions and carry out financial innovation in rural areas. Even though Development environment, as well as the results of cross-strait history of the rural financial system are different, we can learn from the experience of Taiwan, which has important theoretical and practical significance to deepen financial reform of China’s agricultural system.