China's Rural Financial Supply And Demand Imbalance In The Underlying Mechanism Of Research

Since reform and opening up, the rural financial system of our country has changed a lot, the central government has aslo put a new premium on this work. Eleven No. 1 central documents since 1982, the annual Central Economic Working Conference since 1994, three national financial Working Conference since 1997 and many important documents and conference spirit ,for exmaple,the decision of the Third Plenary Session of the 17th Central Committee of the Communist Party of China have repeatedly mentioned that china will increase rural financial reform and vigorously develop the rural finance to solve financing difficulties facing the peasants.Although under the excellent situation of rapid development of national economy, considerable support of the central government, great improvement of technology level and financial institutions with abundant funds, the financial imbalances between demand and supply in our rural financial market has never been solved entirely.Why? What should be done?In order to solve these two problems, this paper re-examines the changing cause of rural financial institutions and the institutional defects in view of the transaction cost, based on the previous research achievements , analyzing the formal and informal rural financial institutions from three aspects of the financing cost,operation cost and risk cost, making more effective explanation to the current financial imbalances, and taking reduction of transaction cost as its storyline,the paper trys its best to propose the effective countermeasures. The whole paper can be divided into following six parts:The first chapter is introduction.Starting with research backgrounds,this chapter simply introduces the problems faced by rural finance, combs modern financial theories such as the financial and economic development theory, financial control and financial deepening theory and financial constraint theory, it meanwhile traces agricultural credit subsidies theory, rural financial market theory and imperfect competition market theory, and further reviews the evolution of transaction cost theory and relative researches at both home and abroad, establishing the loan transaction cost of rural financial institutions as the breakthrough point, introducing the research methods and maproad, and making simple summarization to the content of paper.The second chapter is mainly about descripton of the current problems and analysis of the reason. At first ,it reviews the development of rural finance after 1949 which can be divided into four stages,And then defines the standards of financial imbalance of the supply and demand from the perspective of economics, on the basis of them, this chapter demonstrates the current problem of being under supply seriously in our rural financial market, and expounds the five adverse effects which it brings to the economic development.The final part of chapter explains three main sections of loan transaction cost of financial institution(financing cost, operation cost and risk cost) ,and theoretically analyses the main reasons of rural financial disequilibrium in our country .The third chapter chiefly focus on the research about the loan transaction cost of formal rural financial institutions. by convention , the rural financial institutions in our country can be fallen into formal ones and informal ones, the former includes State-owned commercial banks, postal savings banks, agricultural development banks and the rural credit cooperatives (including rural commercial banks and the rural cooperative banks after reform) an so on. The chapter reviews the history of these formal financial institutions, analyses their changing resons in view of transaction cost and explores the advantages and disadvantages of them.Accordingly, The fourth chapter is about the loan transaction cost of informal rural financial institutions. This chapter reviews the development of rural civil finance and the credit of small amount in rural, expounds their vital roles during the development of rural economy in our country, analyses their advantages in comparion with the fomal financial institutions, pointed out the reasons of the dogged vitality of them as well as the mistakes and problems in their development processes, and summarize the advantages and disadvantages of loan transaction cost of formal and informal rural financial institutions in the last section. The fifth chapter introduces the foreign rural financial system. It takes three typical countries such as America with high degree of agricultural modernization and Japan with extremely advanced farmer cooperative organizations as well as India which is same as china for example,summarizes their experiences in solving rural credit problems from the perspective of transaction cost, provides excellent reference to reform and perfect our rural financial system.As the last chapter, chapter six tries to propose some suggestions to improve our rural financial system on the basis of the above analysis. This chapter, under the guidance of the scientific viewpoint of development,by the means of accelerating transformation of the mode of economic development,takes the reduction of the loan transaction cost as its storyline, projects advices on the reform of formal and informal rural financial institutions,and further gives some effective measures including improvement of agricultural insurance and establishment of rural credit system to reduce transaction costs .The innovation of this paper mainly lies in that it discusses the inbalance between supply and demand of rural finance from the perspective of transaction cost , divides transaction cost into three parts which are financing cost,operation cost and risk cost,reveals the current problem of high transaction cost in our rural formal financial institutions,and systematically puts forward the goal,framework and the concrete measures of reform of rural financial institution in our country.However,because there have difficulties to collect related material and data of some financial institutions, it is hard to make the quantitative analysis to the loan transaction cost differences between formal and informal financial institutions through the establishment of mathematical model, hope research in this area can be further continued and make a breakthrough in the future.