Research On China's Rural Finance-supply And Demand Structure

Structural mismatch between rural finance-supply and demand has always been oneof the key issues that restrict development of China's rural financial reform. This paperaims to analyze the current situation, causes and basic characteristics of China's ruralfinance-supply and demand structure, the unbalance situation of supply and demandstructure and its reasons, and the relationship between rural financial development andrural economic growth in supply and demand structural unbalance. The paper putsforward the measures to construct the supply and demand structure and coordinate ruralfinancial system from the new perspective of "comprehensive view", and take somereference from international experience.This paper bases on the theory of rural financial development, financial resources,financial function and the institutional change, and does the research with thecombination of reference and innovation,qualitative and quantitative analysis,theoretical and empirical analysis, historical and logical analysis. We expound thepaper with the thoughts of “putting forward-Analyzing-solving the problems”. Puttingforward questions: structural unbalances of rural supply and demand is the key issuethat restricts development of China‘s rural financial reform, gives the domestic andforeign related literature on theoretical and empirical research, and poses the startingpoint of the research.Analysis the problems: firstly, the paper defines the basicconcepts involved in this article, and interprets the relevant economic and financialtheories; secondly, the paper analyzes China's financial supply structure propelled by"Top-Down" style of rural financial development and financial demand structure by "Top-Down " style of rural economic reform,mainly including the general situation ofrural finance supply, rural financial system reform, rural financial supply subject,rural financial service and its innovation, as well as the characteristics of supply ofrural finance, and rural financial function, rural financial demand subject, ruralfinancial demand service and characteristics of rural financial demand service and themain way to meet the demand; thirdly, the paper analyses the situation of ruralfinancial supply-demand structural unbalances and its causes from total amount,hierarchy, coverage and sustainability; lastly, the paper analyses the impact from the microscopic effect mechanism, Meso-industrial structure optimization, outputefficiency of macroscopic input on rural financial supply-demand structural unbalancesin terms of empirical evidence. Solving the problems: from the perspective of"comprehensive view”, the paper puts forward the measures to construct structure ofdemand and supply and harmonize rural financial system.Base on above analysis, we know that: firstly, the paper combines organicallyrural financial resources theory and rural financial development theory, puts forward anew paradigm of analyzing the relationship between rural economics and finance--"comprehensive view", which achieves harmonious unification of the "institutionalview" and " functional view", and is a new perspective to promote the reform of China'srural financial system. Secondly, China's rural finance supply has the characteristics of"one strong-two high-one weak", namely:" one strong" refers to that the China's ruralfinancial supply structure basically is the result of the official mandatory system changes;"two high" refers to the strong "monopoly" and "homogenization" of rural financialsupply structure, and the "homogenization" includes nature of the main body of suppliesand supply services;"one weak" refers to that the rural financial institutions, especiallythe corporate governance structure of rural credit cooperatives is relatively weak,needing further reform and define. Lacking rural financial institutions with differentnature may lead to the failure of the correspondingly rural finance special function aswell as the absence of the overall function.Thirdly; the characteristic of different stagesof the rural economy development determines the change direction of rural financialdemanding party and the desired service. On the whole, China's rural financial demandpresents the five characteristics of seasonality and disperse complexity, low income andhigh risk, sufficient collateral and high transaction costs, diversity and hierarchy, thelack of major party of investment and financing with market-orientation. The ruralfinancial system with imperfect institution and function is difficult to meet the demand ofrural finance effectively.Fourthly, through analyzing the situation of rural financialsupply-demand structural unbalances from the total amount, hierarchy, coverage andsustainability and its causes, we find the mismatch of rural financial supply and demandstructure, the present rural financial system of China relies on high cost to maintain thebasic financial services, and financial satisfaction degree of rural major demanding party is still relatively low, the commercial sustainability of rural financial system is stillrather poor. Lastly, the empirical results show that, whether micro mechanism ofChina's rural financial development with economic growth, the structural optimizationof the Meso-industrial, or macro input-output efficiency, all are inefficient, due tounbalance in the rural finance structure of demand and supply, fail to give full play tothe function of financial allocation of resources and realize the coordinated developmentof economy and finance.For this conclusion, based on the reference from international experience andcombining the national conditions, the paper puts forward the overall aims andprinciples, specific developing countermeasures and related supporting policy measuresto construct China's structure of supply and demand to coordinate rural financial system.Specific developing countermeasures include: to reform main rural financial institutions;to encourage and support every type of the new rural financial organization; toaccelerate the development of agricultural insurance further; to guide and standardize theinformal finance; to increase the innovation of rural financial service degreely. Relatedsupporting policy measures include: to establish and perfect rural financial laws andregulations; to coordinate and integrate various policies and funds; to reform ruralfinancial supervision system; to strengthen the propagation of rural financial knowledgeand cultivating the talent of rural residents; and to create a good rural creditenvironment.