A Study On Reform Of Agricultural Development Bank Of China

Agricultural Development Bank of China (ADBC) was established on Nov 18, 1994, which subsequently integrated the segmented business of agricultural policy-oriented finance in China. Until 1998, the State Council of China decided that agricultural development loans should be stripped from ADBC. Thereafter ADBC's main business was only the Closed Operation of Grain Purchase Funds (COGPF). Though ADBC has done much for the construction of national grain reserve system, agricultural and rural economy development, ADBC is encumbered by many serious problems some of which can even exclude ADBC from existence. For this reason and for the interests of agricultural and rural social economic development and multitudinous farmers in China, conducting research on ADBC reformation and lodging scientific proposals are of great practical significance.Method combined positive and quantitative analysis and case studies on reformations of Agricultural Development Banks (AgDBs) is implemented in this article for reformation analyses of ADBC on its existing problems. The main concerns of ADBC are: unscientific governance structure, Poor operation mechanism, incomplete supervisory mechanism and poor business achievements.Reviews using standards of agricultural policy finance organization, agricultural policy finance system and modern banks are also conducted in this article. Some new findings and conclusions are gained by such analyses, like incomplete quintuple loan classification and low rate of capital sufficiency.By observation and comparison of AgDBs in developed and developing nations (USA, France and Japan for developed countries; South Korea and India for developing countries) and case studies of BRI of Indonesia, BAAC of Thailand and ADBN of Nepal, some important conclusions and policy proposals are achieved. The mian conclusions are: 1. Reform for our agricultural policy-oriented finance is necessary. 2. Reform of AgDB is feasible. 3. Closing AgDB is inadvisable for China. 4. Support from financial policies is very important. 5. Legislation for agricultural policy-oriented banks like ADBC is important. 6. Establishment of modern enterprise system and banking system is crucial for ADBC. 7. Slow and ordinal reform should be adopted for reform of ADBC.The policy proposals are: 1. Business scope of ADBC shall be enlarged while continuing COGPF. 2. New fund-raising channels shall be exploited. 3. Establishment of modern enterprise system and banking system is crucial for reform of ADBC. 4. Legislation concerning policy-oriented financial institutions and establishment of supervision system need to be accelerated. 5. The government shall create a favorite environment with proper financial and agricultural policies.