Research On The Development And Reform Of China's Rural Credit Cooperative Institutions In The New Era

As the main rural financial institutions in China,China’s rural credit cooperative institutions(rural credit cooperatives,rural cooperative banks and rural commercial banks)have made outstanding contributions to the work of agriculture,rural areas and farmers in different historical periods.It is the main force to implement the strategy of rural revitalization and develop inclusive finance in the new era.Based on the historical,theoretical and practical perspectives of the development and reform of rural credit cooperative institutions in China,this paper discusses the development and reform of rural credit cooperative institutions in China from the historical,theoretical and practical logic systems.Since its establishment in March 1951,China’s Rural Credit Cooperation Agency has been nearly 70 years.By the end of 2018,China’s rural credit cooperation institutions had 2239 corporate institutions,accounting for 48.8 percent of the total number of banking corporate financial institutions in the country;total assets of 32.8 trillion yuan and total liabilities of 30.5trillion yuan,accounting for 13.5 percent and 13 percent of the national banking financial institutions respectively;loan balance of 16.98 trillion yuan,accounting for12.5 percent of the national banking financial institutions;and nearly 900,000 employees in the whole system.This rural financial system includes 812 rural credit cooperatives,30 rural cooperative banks and 1397 rural commercial banks,all of which are independent legal entities,one county(district)and one party,which are under the management of provincial banks(leagues),and the regulatory body is responsible for industry supervision.After nearly 70 years of development,China’s rural credit cooperation institutions have now developed into the Chinese banking system,the system is complete,the largest assets,the largest number of employees,the most physical network coverage of the financial institutions.Since 2015,China’s rural credit cooperation institutions have been involved in the reform of China’s rural credit cooperation institutions for six consecutive years-the reform of rural credit cooperatives and provincial associations.In 2015,the central document No.1 proposed,“to promote the reform of the rural financial system.We should take the initiative to adapt to rural reality,agricultural characteristics,farmers’ needs,and constantly deepen rural financial reform and innovation.Improve the capital strength and governance level of rural credit cooperatives,firmly adhere to the county,Service for agriculture and rural areas positioning”.In 2016,the first central document put forward,promote more financial resources to the countryside,carry out rural credit cooperatives provincial union reform pilot,gradually fade out of administration,strengthen service functions”.In 2016,the 13 th Five-Year Plan for National Rural Economic Development of the State Development and Reform Commission proposed“improving the rural financial system,including adhering to the combination of commercial finance,cooperative finance and policy-oriented finance,speeding up the establishment of a multi-level,wide-coverage and sustainable modern rural financial system,perfecting the governance structure of rural credit cooperatives,and carrying out a pilot reform of provincial cooperatives of rural credit cooperatives”.In 2017,Central Committee No.1 document put forward,“accelerate the innovation of rural finance and study and formulate the reform plan of provincial union of rural credit cooperatives”.In document No.1 of the Central Committee of 2018,it was proposed that“improve the level of financial services,promote the reform of rural credit cooperatives,maintain the overall stability of the status and number of county legal persons in rural credit cooperatives,adhere to the correct direction of rural financial reform and development,improve the rural financial system suitable for agricultural rural characteristics,promote rural financial institutions to return to their original sources,allocate more financial resources to the key areas and weak links of rural economic and social development,and better meet the diversified financial needs of rural revitalization”.In January 2019,China Banking and Insurance Regulatory Commission’s opinion on promoting rural commercial banks to stick to their position and strengthen their governance to enhance their financial service capacity put forward that“to standardize the role of industry guidance and management,the provincial association should focus on giving full play to the leading and supporting role of rural commercial banks to support the small position of agricultural support,improve the way of performing their duties and enhance their service capacity”.In 2019,the central document No.1 proposed to“promote the rural commercial banks,rural cooperative banks,rural credit cooperatives to gradually return to the original source,Service for agriculture and rural areas”.In February2019,the People’s Bank of China,the Banking and Insurance Regulatory Commission,the Securities Regulatory Commission,the Ministry of Finance and the Ministry of Agriculture and Rural Areas put forward the Guiding Opinions on Rural Revitalization of Financial Services.We should actively explore the reform path of the provincial union of rural credit cooperatives,straighten out the management system of rural credit cooperatives,clarify and strengthen the status of independent legal persons of rural credit cooperatives,improve the corporate governance mechanism,guarantee the rights of shareholders,improve the independence and standardization level of county rural financial institutions.On February 21,2019,the General Office of the CPC Central Committee and the General Office of the State Council,“opinions on promoting the organic link between small farmers and the development of modern agriculture”,pointed out that“support rural commercial banks,rural cooperative banks,village banks and other rural small and medium-sized financial institutions based on the county,increase the strength of serving small farmers”.In March 2019,China Banking and Insurance Regulatory Commission(CBRC)Circular on Doing a good job in banking and insurance services for rural revitalization and helping to overcome poverty in 2019 put forward that“local corporate banks should base themselves on local and serve local areas.Rural small and medium-sized banking institutions should maintain the overall stability of the status and number of county corporate financial institutions,study and promote the reform of the provincial association,and standardize the performance of the provincial association”.On November 25,2019,the People’s Bank of China’s Financial Stability report(2019)pointed out that deepening the reform of the provincial alliance and improving the service level.We should adhere to the direction of market-oriented,legalized and enterprise-oriented reform,scientifically define service functions and business scope,rationally optimize and adjust management matters,formulate lists of performing duties according to law,and clarify the boundaries of responsibilities.On December 10,2019,the Central Economic work Conference pointed out that“it is necessary to push small and medium-sized banks to focus on the main responsibility and main business,and deepen the reform of rural credit cooperatives”.On December 30,2019,the China Banking and Insurance Regulatory Commission’s Guidance on Promoting the High-quality Development of Banking and Insurance Industry pointed out that "small and medium-sized rural banks should adhere to the position of supporting agriculture and supporting small markets,enhance county service functions,support the strategy of rural revitalization,and help win the battle against poverty with precision.Under the premise of maintaining the overall stability of the status of county legal person,the joint-stock system transformation of rural credit union and rural cooperative bank should be carried out according to local conditions.On January 2,2020,the 2020 working meeting of the people’s Bank of China pointed out that“deepening the reform of small and medium-sized banks and rural credit cooperatives”.On February 5,2020,document No.1 of the Central Committee of 2020 put forward,“deepen the reform of rural credit cooperatives and adhere to the status of county legal person”.On May 27,2020,the Office of the Financial Commission of the State Council issued 11 financial reform measures,among them,concerning the development and reform of rural credit cooperatives,and pointed out that "formulate the opinions on the implementation of the deepening reform of rural credit cooperatives,maintain the overall stability of the status of county legal persons,strengthen positive incentives,and do a good job of reform and risk resolution as a whole ".So far,the development and reform of China’s rural credit cooperation institutions has entered a new period.Entering a new era,especially,the first document of the Central Committee in2017-2020 puts forward new requirements for the development and reform of China’s rural credit cooperation institutions.How to objectively analyze the historical process of the development and reform of China’s rural credit cooperation institutions? What is the theoretical basis for the development and reform of China’s rural credit cooperation institutions? How to evaluate the efficiency of the development and reform of China’s rural credit cooperative institutions? How to realize the high quality development of China’s rural credit cooperative organization? and other issues are major theoretical and practical topics.This paper mainly uses six research methods,such as materialism method,historical and logical consistent method,scientific abstract method,quantitative and qualitative analysis method,statistical and metrological analysis method and systematic thinking method,to study the development and reform of rural credit cooperative institutions in China.The research in this paper is divided into eight chapters: the first chapter,introduction.The introduction introduces the research background and significance,research framework,methods and innovations,research deficiencies and follow-up research work.The second chapter,research review and assessment.This paper reviews and evaluates the research literature from the perspective of historical research,theoretical research and practical research on the development and reform of rural credit cooperative institutions in China.The third chapter discusses the historical evolution of the development and reform of China’s rural credit cooperation institutions.In this chapter,the general situation of rural credit cooperative institutions at home and abroad is discussed,the relative scientific division of the development and reform of rural credit cooperative institutions in China is carried out in five stages,the nodes of each stage are defined,and the brief history of the development and reform of rural credit cooperative institutions in China is discussed in general.The fourth chapter summarizes the theoretical basis of the development reform of China’s rural credit cooperative institutions and carries on the economics analysis to its development reform.The theoretical basis of summarizing its development and reform is the Marxist principle of productive forces and relations of production,the theory of primary stage of socialism,the theory of Marxist cooperative economy and the theory of Marxist institutional change.From the perspective of western economics on game theory,financial suppression theory,financial deepening theory and rural financial theory,this paper analyzes the development and reform of rural credit cooperative institutions in China.The fifth chapter empirically analyzes the efficiency of the development and reform of China’s rural credit cooperation institutions and evaluates them.The first is to set the model of its development reform efficiency evaluation,construct the three-stage EBM model and the malmquist total factor productivity index model based on global technology;secondly,the empirical analysis.Selecting the total assets、total liabilities、owner’s equity、after-tax profits,the total assets、number of employees 、 deposit and loan balances 、 agricultural loan balances 、non-performing loan balances of 30 provinces(autonomous regions,municipalities directly under the Central Government,except Tibet)in mainland from 2007 to2017 and 2013 to 2017,using software such as Max DEA to carry out static efficiency analysis,input-output redundancy analysis,dynamic efficiency analysis of malmquist total factor productivity index model based on global technology and test the convergence of the model,The paper concludes that the total factor productivity of the development reform of China’s rural credit cooperative institutions is mainly affected by technological progress,and the overall efficiency of the development reform of China’s rural credit cooperative institutions shows Sigma and Beta convergence.Chapter six,how to realize the high quality development of China’s rural credit cooperation institutions.The first is to explore the path of realizing the high quality development of China’s rural credit cooperative institutions in the new era by combining the new development concept of “innovation,coordination,green,openness and sharing”while setting the model of coefficient of variation method,analytic hierarchy process and entropy weight method;the second is empirical analysis.including constructing index system,calculating index weight and analyzing high quality development.This paper draws four enlightenment and puts forward five suggestions which should improve the evaluation system of high quality development level of Chinese rural credit cooperative organization.The seventh chapter discusses the measure of financial efficiency of Chinese rural credit cooperative institutions serving “agriculture,rural areas and farmers” and the enlightenment of the analysis of influencing factors to the strategy of serving rural revitalization.At the same time,it puts forward how the ultimate goal of its development reform is to better serve the strategy of rural revitalization in the new era,to help meet the people’s financial support for the growing need for a better life,and makes an empirical analysis on a case.Chapter 8,main conclusions and policy recommendations.On the historical evolution,theoretical basis,efficiency evaluation,high-quality development and case analysis of the development and reform of China’s rural credit cooperative institutions,the general conclusions are extracted,and the corresponding policy suggestions are put forward on how to develop and reform China’s rural credit cooperative institutions and how to serve the strategy of rural revitalization in the new era.By reviewing,combing and summarizing the historical process of the development and reform of China’s rural credit cooperative institutions in the past 70 years,and making a relatively scientific stage division,this paper attempts to summarize and refine the ideas and practices of development and reform in different stages.This paper discusses the stage division of the development and reform of rural credit cooperative institutions in China,reveals the internal relation between different stages,summarizes the theory and economic analysis and the efficiency evaluation of the development and reform of rural credit cooperative institutions in China,the new path of high-quality development and a case the measurement of financial efficiency and the analysis of influencing factors of the Services for agriculture,rural areas,farmers of rural credit cooperative institutions in China.Conclusion of historical logic,theoretical logic and practical logic of the development and reform of China’s rural credit cooperative institutions in the new era and its policy suggestions are the main contributions of this paper.