On Rural Community-based Shared-holding Cooperation In Urban Fringe With Special Reference To Its Origin, Performance And Further Reform

Since the Community-based Share-holding Cooperation System (CSCS) emerged in the middle of 1980s in China, it was adopted broadly in rural area of the Pearl River Delta in Guangdong Province. Some developed areas, like Jiangsu Province and Zhejiang Province, also started to introduce the CSCS at the beginning of the 1990s. Recently, more and more rural community in the peri-urban area sent up their own share-holding cooperative enterprises. However, the CSCS was not broadly got consensus among the stakeholders in various areas, especially in the community with less collective assets and still focusing on farm production, due to the regional difference in the performance of the reform.This paper mainly discussed the origin of the CSCS and its boundary of extension, the method of policy evaluation, and pathway for further reform. According the result:(1) The intrinsic disadvantages of collective property regime and the changing economic and social environment, such as the increase ratio of non-agriculture employment, the economic structure converting from agriculture dominated to non-agriculture dominated, and the added value of collective assets, combining with the farmer's appealing for defining property and political democracy together contribute to the institutional change. The consequence of institutional change is that the transaction cost among the community declined as well as the ability to catch external profit increase, and thus it improves the welfare of the community. In addition, the boundary of the CSCS lies on that the expected benefit of institutional change is no less that the expected cost.(2) Although there exists variation in economic consequence among communities, the CSCS makes achievements, compares with traditional collective regime, in the following aspects: Firstly, it clearly defines the property rights among the farmers, the community and other stakeholders; Secondly, it enhance the property power, the share can be assured interests, can be inherited and can be sale out to a limited buyers etc. Finally, the CSCS makes the best hope for introducing the formal governance structure, which may lead to outstanding performance in running the assets.(3) There are still some issues, like the existence of collective share, lower fluid ability, and the close-end shareholder etc., remain to be solved in the future to assure a sustainable growth in the CSCS. The trend for further reform will be enlarging the proportion of private shares in the total shares, deeper segregation between the ownership and the using right,...