The Behavior Of China's Rural Financial Organizations And The Institutional Environment

Although the Rural Cooperative Foundations (RCFs) had been shut up, the influence of the RCF on rural economy have not disappeared. There have had many problems have not resolved. So, it is necessary to sum up the lessons of RCFs to benefit for the development of China's rural finance. According to the characteristic of RCFs in some regions, the RCFs were different in different regions from the property rights to management system. This paper is a positive study on the difference of RCFs in the regions of Leshan and Wenzhou on the basis of new institutional economics, which consist of six chapters.Chapter 1 introduces the reasons to select the RCFs as the object of study, the method of the study, the meanings of the study. The meanings lie in the study gives a new angle of view to grasp the situations of rural finance and the problems in it through summing up the lessons in the development of RCFs. The theoretic meanings lie in the study combines institutional economics with the practice of rural finance in China to analyses the relationship between the organizational behavior and the institutional environments. The policy meaning is the study considers the government should continue the reform and supply a fair institutional environment for the competitions in rural financial market.Chapter 2 gives a summary and comment on some study results on RCFs up to now, the summary pays attentions to the background, the property rights, position and role, and the problems of RCFs. The author considers the common feature of these studies is the studies regard the RCFs as a whole, neglect the differences of RCFs in different regions, and not coordinate with the practice. So, in the paper, author emphases the individual characteristics of RCFs, and analyses the causes of the differences in the light of institutional economics.Chapter 3 is a survey report on RCFs in Leshan in Sichuan province. In the chapter, author introduces the background, the developmental history, management system, and the closing down of RCFs in Leshan, and gives three RCFs as the cases. The conclusion is that the RCFs in Leshan were not the separated economic organizations with clear property rights, but the subsidiary bodies of local government. The numerous bad assets of RCFs were resulted from governmental interventions. After the closing down of RCFs, Rural Credit Cooperatives (RCCs) have monopolized local financial market, the financial supply is very insufficient for the demand, andthe local economic development is at a standstill.Chapter 4 introduces the situations of RCFs in Wenzhou region, and emphases the characteristics of RCFs in there differed from Lesnan region. The ownership of most RCFs in Wenzhou is private in property rights; unlike the situations in other regions, the limit between deposit and share is clear. There are three governments (the System Reform Committee, Branch Bank of People Bank in Wenzhou, and Agriculture Committee) to supervise the operations of RCFs; local government and the departments in charge do not intervene the internal affairs of RCFs. Most RCFs are legal economic organizations, and some of them also have the licenses to engage in financial industry. The quality of RCFs' assets in Wenzhou is not only better than the RCFs' in other regions, but also the RCCs' in local. In the closing down of RCFs, local government forced those shareholders to bear unlimited obligations.Chapter 5 is a compared analysis of RCFs in Leshan and Wenzhou in light of the theory of institutional economics. The analysis focuses on five aspects: 1. The background and institutional environments of RCFs are different in Leshan and Wenzhou. 2. The nature of property rights and the legal position of RCFs in Leshan are distinguished from the RCFs in Wenzhou. 3. The behaviors of RCFs and governments are different in two regions. 4. The way of closing down RCFs and the effects on local economy also differed in the two regions.Chapter 6 is the conclusions and some suggestions based on the conclusions. 1. In the early period of...