A Preliminary Study Of The Reform Models Of China’s Rural Credit Cooperatives

Modern credit cooperative movement originates in Germany. In the early20th century,the cooperative movement began to enter China. After the People’s Republic of China wasfounded, rural credit cooperatives were popularized all over the country, the system of rualcredit cooperatives has changed many times since then. And have reformed and developedwith the latest reform starting from2003. The major measures are devolving the managementrights of rural credit cooperatives to provincial governments, setting up provincial unions inevery province to be responsible for managing rural credit cooperatives within theirjurisdiction under the authorization of provincial governments, integrating the creditcooperatives into county-level legal persons and implementing capital increase and stockexpansion, the People’s Bank of China issuing special notes to provide subsidies, encouragingplaces where condition permits to establish rural cooperative banks and rural commercialbanks and so on.Since the reform, the state no longer places emphasis on keeping intact the cooperativenature of rural credit cooperatives. Thus, the situation of rural credit cooperatives has changedgreatly. The differentiation trend of rural cooperative institutions becomes evident. Some ofthe rural commercial banks have achieved the general level of modern commercial banks inCorporate governance and capital adequacy ratio, and they even begin to run cross-regionalbusiness. However, rural cooperative institutions still account for an absolute majority inhigh-risk banking financial institutions in our country.This paper set the application as direction, mainly analyze industry macroscopicalpolicy and the impaction of rural credit cooperative for economy system changed. This paperadopts logic analysis as demonstation analysis, assists with case study, main analysis processas below:I. Colligate with the main opinion of western cooperative economy group, demonstrate the cooperative principle based on theory, point out cooperative system often adapt toagriculture and handicraft industry naturally, due to its public and politic character.II. Analyze the development history of western and southeast Asian cooperativeorganization, explores the development history of major foreign cooperative financialorganizations and puts forward that the evolution of foreign cooperative financialorganizations in the market economy is of great comparison and reference significance to ourcooperative financial reform and development.III. After analyze the rural credit cooperation innovation, divide it into six stages, andfocus on analyzing the outcomes and existing problems in rural credit cooperatives’ newreform, this paper puts forward that a contradiction of target duality exists between the reformdirection of joint-stock commercial banks and the requirement of assisting “agriculture, ruralareas and farmers”. Point out the rural credit organization should choose the most suitableproperty system and form the multiple rural economy system.IV. Analyze the power source of provincial unions, this paper puts forward that there is anon-equivalent contradiction of power and responsibilities in the provincial governments’management of rural credit. By analyzing the reformed management of rural creditcooperatives and supervision system, it puts forward that the reform models of provincialunions lead the reform direction of rural credit cooperatives in the provincial regions, andthey are the key link of the next reform of rural credit cooperatives.V. Government and bank supervision institute sent the request to rural credictorganization of serving “agriculture, rural areas and farmers” and service belongs to economy,at the same time, request to accelerate the change of shareholding system. This paper putsforward six optional models for rural credit cooperatives in the provincial region in the nextphase of reform, analyzes the advantages and disadvantages of the models, and analyzes theadvantages and disadvantages of all modules. In addition, taking the reform of Rural CreditCooperative of Guangdong Province as an example, it puts forward that setting up unionbanks is the best way to deepen the reform of Rural Credit Union of Guangdong Province,and in practice, it to some extent provides reference value for the path selection of the reformof rural credit cooperatives in the provincial region.VI. This paper summarized the history of the development of China’s rural creditcooperatives, it puts forward to reform initial stage produces result will quickly weakenwithout long-term policy as the support, so in view of then structural contradiction and theproblems exposed for the current reform of rural credit cooperatives, this paper puts forward to establish and promote the long-term mechanism as soon as possible for promoting ruralcredit cooperatives development, and for assisting "agriculture, rural areas and farmers", andfrom the support of legislation, reform of property right system, guarantee and compensationmechanism, it puts forward eight specific policy recommendations.