China’s Rural Credit Cooperatives Corporate Governance Reform

China is the world’s largest developing country, all-round development of agriculture, rural areas and farmers plays a significant position in the country’s development process. Finance is considered as the core of modern economy, similarly, rural finance is important to promote social development in rural areas,increase farmers’income and sustain social stability. Rural Credit Cooperatives(RCC) is the main force of rural finance and has an irreplaceable role in rural financial system, the reform and development of RCC have an effect on the improvement of rural financial services, the increasing of the rural financial efficiency, the comprehensive and healthy development of the "three rural" policy and the overall development of economic and social.Chinese RCC’s reform and development has gone through a lengthy process since its establishment. Though it had several reforms, the reform of rural credit cooperatives is still controversial now, some scholars believe that the cooperation system is more realistic, others believe that joint-stock system is the only way of RCC reform. Since2003, RCC reform policies has introduced a compromise plan under the dispute circumustance, which declared an requirements:marketization and clear property rights, and didn’t make specific requirements in the form of property rights,not only either cooperative system, but also joint-stock system and stock cooperation system were allowed.Recalling a decade of reform, the reform of RCC achieved excellent results, the property rights system made a progress, the profitability increased significantly, the asset quality was significantly improved. However, while affirm our achievements, we should be noted that some deep-seated reform of rural credit cooperatives mechanisms still exist, and our system si still far from the modern enterprise system.This article uses the perspective of corporate governance, first and foremost, it analyses the problem of the internal and external governance of RCC. RCC system had an internal governance structure based on cooperation system previous, with the economic globalization, rural economic environment has gone through significant changes, joint-stock form increases obviously. But as the process of RCC now, cooperation system faces great challenges. RCC faces many challenges of internal governance, so strengthen and improve its external governance is particularly necessary, in reality, especially the government executive power of governance acts as a major force in the external governance, its role can not be underestimated. No matter in past and present, the power of government administration have played a very important role in the entire RCC governance structure of different countries, some countries (e.g. China) are always the main driving force of RCC’s reform, therefore, the research of the role of government intervention and management in RCC’s reform and development is necessary. This is why I analysis theories about the government’s participation in RCC external governance, analysis the reasons of the government involvement in rural credit cooperatives external governance and analysis the problem of weighing a reasonable degree of government partcipate in external governance.Next, the paper reviews the process of corporate governance in Chinese RCC’s reform, analyzes its characteristics, introduces the current status of the governance structure and teases out the problems and difficulties we have to face in RCC’s corporate governance reform nearby.Later, I introduce the selection of provincial association of Chinese RCC’s corporate governance reform mode and six modes. Combine with six modes and the above theoretical analysis, I put forward viable model and path selection ofShandong Province’s association in the future.Last but not the least, combine with the analysis of previous sections, with the question of how to deepen RCC’s corporate governance reform, I put forward a policy suggestion with six aspects:1.adjust measures to local conditions and advance gradually in due order to promote the reform of RCC’s property right system;2.complete corporate governance structure and strengthen self-discipline;3. complete laws and regulations and determine the boundary and function of all related authorities;4. rational allocate shareholder’s rights and achieve scientific decision-making;5.government participate in the governance of RCC with an appropriate way;6. ensure that members can use the goverance right with a low-cost method.