A Study On China's Rural Cooperative Financial System During Transitional Period: Institutional Construction And Innovation

Cooperative finance was given birth to in Europe in the nineteenth century and has then spread throughout the world in the following centuries. The current formal rural financial system of China is composed of commercial finance, policy finance, and cooperative finance which is the core and foundation of the system. Rural credit cooperative union is the concrete form and entity of cooperative finance in the countryside of China. In recent years, there are variances of the operative orientation and functions of the rural credit cooperative union as the result of dramatic changes of the environment and background for the survival and development of rural cooperative finance in China in the past dozens of years as well as the institutional lability of administrative mechanism. A reform is imperative under the situation.Based on property right economics, new institutional economics, and basic principles of rural credit cooperative, this paper analyzes the foundation, developing process, current difficulties, and system defects of rural cooperative finance through comparison analysis, supply and demand analysis, etc. Then, it elaborates and analyzes the rural economic agents'demand of financial service and the game between the peasants and the government regarding the development of cooperative finance. The thesis has proved that the financial organization based on the cooperative principle in China is efficient and of great potential. At last, the thesis puts forwards the reform approaches of property right system, institutional structure, modes of operation and management, and its exterior environment according to the characteristics of countryside credit cooperative.This paper consists of five chapters. The first part is the introduction, which introduces the research background and implication of the study, and puts forward the argument of this thesis. The second chapter has defined the relevant concepts of cooperative finance and compared the status quo and the development mode of the rural cooperative finance in the foreign countries, so as to shed light on the basis principle of the rural cooperative finance. The third chapter is the theoretical analysis on the development of China's rural cooperative finance. The demand and the supply of the rural finance, and their efficiency have been studied in order to find the breakthrough of the reconstruction of China's cooperative financial system. The fourth chapter has dealt with the development mode and the organizational reconstruction of China's rural cooperative finance based on the discussion of the defects of the traditional cooperative finance in China. The fifth chapter has studied the problem of the innovation of the China's rural cooperative financial system. It has been put forward that in the transitional period, to reform and reconstruct the rural cooperative financial system in China, it is essential to carry on necessary improvement and innovation in the fields of defining property right, corporate governance, and operation mechanism. At the same time, the reform and innovation in the legal support and supervision of the rural cooperative finance, as well as the formation of a good external environment such as the governmental support and promotion of modern cooperative consciousness should be attached a lot of importance. Only so can a healthy and sustainable development of rural cooperative finance be achieved in China.