Research On Chinese Rural Credit Ration And Its Performance Assessment

The construction of Socialistic New Country is a most important historical mission relative to the construction of Well-off Society and Modernization. Whether to develop the Modern Agriculture, or to promote agricultural production and increase the farmers'income, or to build the rural infrastructure, rural finance is very necessary. However, the Chinese rural ration widens the gap between the demand and the supply for the rural credit. The Chinese rural ration becomes the obstacle for the construction of New Country.Theoretically,The endogenetic system and the credit market imperfection make the disequilibrium ration and the equilibrium ration to be typical phenomenon in the Chinese rural credit market. The Ration Theory indicates that interest control, adverse selection, moral hazard, transaction cost, absence of property right and system and financial monopolization can all lead to ration. The evidence says that the Chinese farmers and rural medium & small enterprises face terrible ration problems. The researchers believe in their survey that the rural credit resource in the rural credit market is hardly available for the farmers and rural medium & small enterprises. Based on the fact and the Ration Theory above and Rural Economic Ddevelopment Theory, this paper uses many quantitative methods, such as Co integration Analysis, Match Estimation and DEA, etc, to calculate and assess the performance of the Chinese rural ration macroscopically and microcosmically, qualitatively and quantificationally, to check the efficiency of the Chinese rural ration. Finally, this paper makes suggestions and policy advice to promote the ration's performance.This paper has tow targets: one is to research the credit ration feature in the Chinese rural credit market based on the credit ration theory, and the other is to calculate and appraise the performance of the Chinese rural credit ration on the basis of the credit ration's effect on the economy. The article is divided to three parts for the targets, including eight chapters. The first part contains Chapter 1, Chapter 2 and Chapter 3. In this part, the paper firstly qualitatively analyzes the factors that generate the rural credit ration after the credit ration's concept and its extension. Then the paper uses empirical studies to ague qualitatively and quantificationally about the existence of the credit ration in the Chinese rural credit market. At last, the third chapter traces the transition of the financial system to know completely the course of the rural credit ration. The second part contains Chapter 4, Chapter 5, Chapter 6 and Chapter 7. Chapter 4 designs a two-period dynamic model to find how the credit ration affects the investment and production of the rural economic entities and explain clearly the ways in which credit ration influences the money policy. Following that, Chapter 5 describes qualitatively and quantificationally the credit demand and supply in the country, then calculates how much the credit demand is satisfied to assess the performance of the credit ration preliminarily. To acquaint more about the performance of the credit ration, Chapter 6 continues to compute the efficiency of the rural credit ration by Co integration and analyze the effect the credit ration has on the farmers'welfare by Match Estimation. Then Chapter 7 researches the income and the cost in the ration process of the rural financial institutes and assesses preliminarily the credit ration's performance for China Agricultural Bank and Agricultural Development Bank of China,and takes the Rural Credit Cooperatives of JN City in Shan Dong province for example to assess further the credit ration's performance for rural financial institutes by DEA. Finally, the paper measures the credit ration's efficiency for risk controlling by DEA with the Rural Credit Cooperatives of JN City in Shan Dong province as example. The third part has Chapter 8 only included. This part puts forward policies and proposals to improve the performance of the rural credit ration at the basis of the paper's summary of research findings.The paper's basic research conclusions are:(1) Disequilibrium ration and equilibrium ration are obviously present at Chinese rural credit market. From the factors leading to credit ration, there are all the factors about system and market in Chinese rural credit market. System is endogenous at Chinese rural credit market, and disequilibrium ration changes with the transition of the rural financial system very relative to the development of rural financial institutions, the structure of rural credit market, the interest controlling and the system of the country credit management.(2) The degree of rural credit ration generally is alleviated. The changes of the degree of the agricultural credit ration depend on the rural financial system. There is a difference in the credit ration degree between agriculture and medium & small enterprises. In detail, the degree of agricultural ration becomes smaller and smaller; relatively, the degree of medium & small enterprises'ration becomes more and more terrible year by year. The difference has something to do with the information imperfection. However, in the case of information perfection, the poor are rationed terribly and the information is more perfect, the ration is more terrible for the poor. So the government should play the most roles in the project of supporting the poor.(3) The paper finds that the efficiency of agricultural credit ration is very low, and the causes include adverse selection, the government's credit policy, the law of diminishing marginal and the credit substitution. At another hand, that of medium & small enterprises is relatively high. This is because the information perfection degree between the financial institutes and medium & small enterprises is lower than that between the financial institutions and farmers. Another discovery by comparison is the efficiency of agricultural credit ration at the initial stage of the rural financial system is higher than that at the later stage, which results from the blindness of the government credit and the law of diminishing marginal. The comparison also finds that the credit ration's efficiency of medium & small enterprises is higher than that of agriculture, which results from the information imperfection.(4) One of the conclusions is that rural credit ration cuts down the farmers'welfare in the income, life consumption, medical expenditure and education expenditure. The paper finds by the Match Estimation that the credit ration has conduction. That means, the credit ration can reduce directly the rationed farmers'welfare, and also indirectly reduce the welfare of those who are not rationed. As a result, credit ration must be removed to promote the farmers'lives.(5) The article finds out that credit ration brings loss for China Agricultural Bank and Rural Credit Cooperatives and brings profit for Agricultural Development Bank of China, which results from the system and market: at one hand, the interest controlling narrows the profit space; at the other hand, the imperfect market increases the credit ration cost. So lessening the system constraint and making the credit market perfect is the key to improve the performance of the credit ration. At last, the paper finds by DEA the credit ration can restrain the risk from credit, which may be the only"advantage"of the credit ration. However, there are differences in the risks controlling by ration for different financial institutions.