Research On The Reform Of Rural Investment And Financing System In China

Capital, as a special production factor, has important function on the rural economic growth, good investment and financing system and its operating mechanism which is capital accumulation needed propel to convert deposit into investment. At present, Our country's serious rural fund shortage phenomenon has already become the factor of restraining development of rural economy and society. In the writer' opinion, deepening the reform of rural investment and financing system may promote agricultural sustainable development, rural economic growth, rural society progress and dispel" dual economy pattern "and realize the coordinated development in urban and rural areas and the overall well-off society. The research of reforming rural investment and financing system has important theoretical value and practical significance.The writer systematically made an overall analysis on the reform of rural investment and financing system, according to clue of theoretical research of investment, basic research, system change, system reform, adopting the research methods of ordinary statistics and case investigation, positive analysis and normative analysis, system analysis and game theory. The content of the thesis is divided into four portion: First of all, such basic problems as the theories of rural investment, the relationship of investment and financing and economic growth and the concept of rural investment and financing system are stated. Then the writer analyzes the Subjects and theirs behavior, rural financing way and rurai investment way in an all-round way. And then systematically studies the system changes of rural investment and financing, current system drawback and questions caused and the reference of the system of the rural investment and financing of market economy countries. At last, the goal pattern of the system reform of rural investment and financing and supplementary measures are proposed, especially the concrete content of the reform is analyzed.The foliowings are the main points of the thesis1 , The system of rural investment and financing is the general designation of operating mechanism and management system of rural investment and financing activities, its content mainly Includes the establishment and behavior of the subject of rural investment and financing, the way of rural capital collection, the pattern of rural investment, the procedure ofrural investment project decision, the management of construct and implement and the system of macroscopic control. The system of rural investment and financing is divided into four respects in view of the need of study, that is the subject of rural investment and financing, the way of rural investment and financing, the system of rural investment decision and management.2^ The subject of rural investment and financing of China mainly includes governments, financial institutions, farms, Rural collectives and rural enterprises. The writer draws the characteristic of behaviors of governments, financial institutions and farms by synthetically analyzing the routine statistical data since 1978. The characteristic of government behaviors of rural investment and financing lies in follows: (1) The absolute scale of investment in agriculture increases steadily, the relative scale is dropping wandering up and down, which is difficult to reverse in a short time because of the restriction of the financial resources of China.(2) The structure of investment in agricultural is unreasonable and the investment in agricultural science and technology and agricultural capital construction is low in proportion.(3) The local government has been the main body of investment in agriculture all the time, and the proportion of agricultural expenditure of local government to its total expenditure keeps dropping. The characteristic of financial institutions behaviors of rural investment and financing lies in follows: (1) The absolute scale of rural credit increases constantly and the relative scale drops obviously. The increase rate of rural credit is dropping overallly with great fluctuation. (2) Short term loan is the core, the proportion of agricultural loan and township enterprise loan is low. The characteristic of farms' behaviors of rural investment lies in weak increase in investment, investment relying mainly on primary industry, short-term Investment and partiality for housing in the investment in fixed assets. Farms have stronger inclination of financing from informal financial.3 > In the writer' opinion, the government investment in agriculture of central and local belongs to non-cooperative game. The result of gaming throws light on the behaviors that the proportion of local government expenditure for agriculture to its total expenditure keeps dropping always. Proceed from financial institution behavior, credit ration caused by interest rate control, valuntary default, informational asymmetries and highly operating cost is the important reason of rural credit shortage. Using the developed "walking stick theory", thewiiici maws tuiiciuMuu ui launs uiioiiumg orucr, inc usi is inner nnancing, me secona is credit support of financial institutions, the last is borrowing money from relatives and friends, namely relationship credit which have caused to substitute informal financial financing with its universality and validity for formal financial financing.4-* According to the principle of raising the government investment efficiency, meeting the needs of public financial function and observing the regular of WTO, and thinking of the national conditions of China, the writer defines the confines of government investment in rural. (1) Agriculture, including agricultural basal facilities construction, agricultural structural adjustment, agricultural industrialization, agricultural social service system construction, agricultural science and technology popularization, agricultural products allowance and agriculture's relieving support system construction. (2) Rural public goods, including rural basal facilities, rural compulsory education, rural health care, rural communication and telecommunication, rural culture, rural science popularization and rural minimum living guarantee. (3) Rural small and medium-sized enterprises. According to marginal efficiency of public investments to rural GDP, the writer tables the following proposals in order to optimize the order of government investment in countryside: (1) government should continue strengthening the investment in countryside, (2) It is imperative to increase the investment in agri-scientific research, (3) the investment in the rural basal facilities should be paid close attention, (4) the investment in irrigating should be reduced properly. According to national industrial policy, regional resource advantage and farms one's own working condition, in the writer's opinion, farms should choose the investment orientation of " focusing on one line of business as main and diversifying ", that is, (1) agriculture, including diversified costs correlated with agricultural production, (2) the secondary and tertiary industries in countryside, including agricultural product deep processing, rural circulation, selling in batches and retailing in countryside, rural catering trade and service trade, (3) imperative and inexpensive public goods from which villagers are benefited in the specific range.5> The writer studies the course of system changes of rural investment and financing and all sorts of phenomena and contradictions during that, using system changes theory, regarding the systematic change of the whole national economy as the background. Using for referenceis that, (1) the system of rural investment and financing should be suitable for the whole rural economic system, (2) the system of rural investment and financing should be easy to strengthen the macro adjustment and control function, (3) the subject of rural investment and financing should be put in the first place of reform, (4) The system reform of rural investment and financing should be in accord with the reform of tax, finance ,etc.Through practice of the reform of more than 20 years, the system of rural investment and financing has broken through the constraint of the traditional system basically and is Transforming towards the socialist market economy system progressively, however there are some drawbacks in the current system of rural investment and financing. (1) The investment and financing mechanism meeting multiplex subjects of rural investment and financing has not taken shape yet. (2) The rural financing channel is narrow, the investment and financing way is single. (3) The scientific process, democratization of the rural investment decision have not been really implemented yet. (4) The management system of rural investment and financing is imperfect. The above drawbacks have caused a series of questions such as low efficiency of government investment in agriculture, ampliative difference of deposit sand loans, the outflows of rural fund, the flourish of folk debit and credit.6> In the writer' opinion, The goal mode of the system reform of rural investment and financing of China should be government's leading market-based investment and financing system during system transition period. Concretely, regarding marketization and socialization process of rural investment and financing as the goal, the multiplex system of rural investment should be constructed in which farms' investment is the body, government1 investment is the direction, financial institution' investment is the support, capital from foreign countries and securities business is the complementarity. The way of investment and financing should be renovated depending on the capital market. The decision system and risk compensation mechanism of rural investment and financing should be established and perfected, according to the principle under which investor, decision-maker, benefit- collector and risk-bearer are accordant. The mechanism of capital element collocation and management which is indirectly adjusted and controlled by government should be implemented.While studying the concrete content of the system reform of rural investment and financing, in the writer' opinion, under the background of developing the capital market in amore cost-effective manner, the way of rural direct financing innovation should be corporate bond, special bond, investment funds of agricultural industry, the way of rural indirect financing innovation should be assurance financing with fund type, the innovative way of rural basal facilities which are charged should be assert securitization, the innovative way of rural basal facilities which are common welfare should be regarding government as users, catching value and speculative development.Is In the writer' opinion, deepening the reform of rural investment and financing system is a systemic project which is based on the innovation of rural finance system agricultural management system, rural tax system and credit system.