The Study On Measures To Improve China’s Rural Financial System

Determined by the economic base, the financial system is able to exercise reciprocal influence on the economic base. A well functioning financial system is contributive to steady and robust development of an economy; in much the same vein, it on a healthy rural financial system that rest the steady development of rural economy, the growth of rural incomes and the improvement of living standards in rural areas. Therefore the reform and development of the rural financial system play a pivotal role in the fundamental solution for the "three rural issues" in China.After30years’reform and development, the rural financial system in China is still hindered by problems which include internal ones such as retreat of commercial finance from rural areas and absence of rural policy-based finance, and external ones such as insufficiency in agricultural insurance institutions and absence of external regulation. These problems have caused the outflow of capital from rural areas, hampering the development of rural economy and finance in China. Hence how to upgrade and improve the rural financial system, which could effectively provide financial support for development of rural economy, is a vital and impending problem to be solved.Based on the analysis of internal and external environment in which rural finance functions, this paper put forth five suggestions to boost the development of rural finance. First, strengthen the macroeconomic control of rural finance, including both fiscal policies and monetary policies. Second, improve financial regulation systems in rural areas, including improving related laws and rules, emphasizing team building in supervision and regulation departments and strengthening industry regulation and self-regulation. Third, strengthen rural credit record system, such as increasing publicity and education of personal integrity and improving personal credit record system. Fourth, establish and improve a rural financial guarantee system, such as implementing reasonable institutions of rural property rights, and establishing and improving ways of rural collateral guarantee. Fifth, establish and improve the agricultural insurance system and other supporting systems.