The Realistic Choice Of RCC's Reform Models

Reform has never ceased since Chinese rural credit cooperatives (RCCs) first appeared in the 50's last century. Although many important changes have been taken place in the process of the foundation and development of RCCs, which have resulted in, to a certain extent, some improvements in the operation and management system of RCCs and contributed hugely to the development of rural economy, some problems like ambiguous property right and less-effective corporate governance structure still exist. The former one especially plays a negative role in the development of RCCs itself as well as the function of RCCs in supporting rural economy. Therefore, it is necessary to carry out a further reform in RCCs. There is no 'best model' in RCCs' reform, and every model has its own advantages and disadvantages. It is crucial to take into account if this model can meet the requirements of the rural economic development for the financial service, and if the performance of RCC itself can satisfy the conditions set by the model. Hence, "cutting it even at one stroke" is unacceptable and impracticable in the range of the whole country, while proceeding in the light of local conditions is the fundamental principle.In accordance with the level of rural economic development and the self-development of RCCs in different areas, the basic assumption of RCCs' reform shall be like this: establishing rural commercial banks in the areas where rural economy is comparatively well-developed; temporarily applying shareholding cooperative system in the suburban areas where the development of rural economy is at an average level; building up real cooperative banking institutions in both the areas where the traditional planting dominate. Meanwhile, related supporting measures shall be improved by all means including rural financial reform, significant support of national policies, and developing the rural insurance, sound agricultural law so as to ensure the smooth implementation of RCCs' reform and strive for the 'win-win' aim of the realization of harmonic development of rural banking institutions coupled with the modernazation of rural economy.