The Performance Analysis Of Joint-stock Reform Of Rural Credit Cooperatives In China

China is a large agricultural country. The development of agriculture and rural economy is the basis of the national economic development. Therefore, the establishment of an efficient financial system in rural areas is the basic guarantee for stable and healthy economic development. As an important part of rural financial system in our country, the Rural Credit Cooperatives have played main role in rural finance and supported the development of agriculture and rural economy in our country. With the implementation of financial reforms in the mid-term1990s, the state-owned commercial banks have withdrawn from the rural financial market, the business of the Agricultural Development Bank’s contraction. Rural Credit Cooperatives have almost become the only formal financial institutions in the grassroots rural financial market. Therefore the reform and development of the Rural Credit Cooperatives relates to rural advance, stability income growth of farmers, even the safety of the whole financial system, and is a good way to improve the competitive forces of rural financial institution and meet the need of rural capital.China’s Rural Credit Cooperatives have gone through a difficult and curving history of development since its foundation. From1978, the beginning of Chinese structural transformation has opened the door to the rural financial reform. Recalling the history of China’s reform of the Rural Credit Cooperatives, the reform of rural financial market development process is the consistent to the Rural Credit Cooperative reform and the rural finance system reform.In1984, the State Council approves the Agricultural Bank’s report on the reform of the Credit Cooperatives management system. The report proposed to restore the Rural Credit Cooperatives’the masses of organization, the democracy of management, the flexibility of operation. In1996, the State Council issued the "State Council’s decision on rural financial system reform", proposing the "cooperative system according to the principle of re-regulation of the Rural Credit Cooperative," "restore the cooperative nature of the Rural Credit Cooperatives,""Rural Credit Cooperatives and the Agricultural Bank of China separated from the executive subordinate relationship", and on this basis, establishing cooperative financial organizations. From2003the State Council issued the "pilot program to deepen the reform of Rural Credit Cooperatives," starting the rural cooperative financial system in a new round of reform. The People’s Bank launched three new property rights system innovation mode, on the basis of the existing cooperative system. Thus, a cooperative financial system based on arrangements in the field of Rural Credit Cooperatives mutation out with a variety of property characteristics of the financial institutional arrangements. In2005, the People’s Bank carried out the plan, including Shanxi, Sichuan provinces and autonomous regions, including five small loan company pilot. From now on, our country has initially formed the Agricultural Bank of China issued commercial loans, policy-oriented Agricultural Development Bank granted loans, Rural Credit Cooperatives are in accordance with the principles of cooperative system. This small loans by commercial finance, policy finance, cooperative financial division of labor in the rural financial system, In actual, most places have joint-stock reform of Rural Credit Cooperatives. As of June2012, there are sixty-five commercial banks in rural areas. Although the joint-stock reform can rapidly improve the governance structure of credit unions and achieve their own business sustainability. But does the current rural peasant economy characteristics are consistent? Does the joint-stock reform of Rural Credit Cooperatives can support agriculture? If can’t achieve the intended target, where is the direction reform of Rural Credit Cooperatives.The new round reform of Rural Credit Cooperatives has been implemented for more than nine years. The effectiveness of the reform has been gradually revealed. But now, the scholars have only evaluated the reform of Rural Credit Cooperatives from one or several aspects. Mainly two factors account for it:first, it is difficult to establish the standard evaluation criteria for the performance of Rural Credit Cooperatives, and Rural Credit Cooperatives are the most sensitive in China’s financial system; second, it is difficult to obtain the panel data needed to study the differences before and after the changes. If we create a set of practical evaluation index system to evaluate the overall effect of the reform of Rural Credit Cooperatives. It will be important significance on optimizing asset quality and enhancing the effective supervision.Based on the above backgrounds, I will study an underdeveloped province’s commercial bank by the focused case studies. First, based on the survey data obtained, this article attempts to establish a comprehensive evaluation system on the efficiency and effects of the joint-stock reform in A Rural Commercial Bank. The evaluation system of Rural Credit Cooperatives in A Rural Commercial Bank includes ownership structure and corporate governance, the level of risk management, profitability and agriculture services. This article will be organized as follows:Chapter1:Introduction, introducing the background, significance, data source and methodology of this research.Chapter2:Theoretical basis and Literature Review. This chapter mainly includes literature review and practice summaries on Rural Credit Cooperatives.Chapter3:The history of reform of Rural Credit Cooperatives. This chapter describes the process of reform and opening-up reform of Rural Credit Cooperatives, based on the analysis of the reform of Rural Credit Cooperatives operating conditions of the system features and characteristics of the changes.Chapter4:Performance analysis of the joint-stock reform of Rural Credit Cooperatives in A Rural Commercial Bank. This chapter describes the background of the joint-stock reform of A Rural Commercial Bank, the joint-stock reform of Rural Credit Cooperatives performance evaluation index system, from ownership structure and corporate governance, the level of risk management, profitability and agriculture services before and after the adoption of reform of A Rural Commercial Bank, longitudinal data comparing the effectiveness of the reform of Rural Credit Cooperatives in A Rural Commercial Bank and the analysis done on the issue, a comprehensive evaluation of the effectiveness of the reform.Chapter5:Profitability goals and supporting agriculture goals:conflict or compatible?Chapter6:Recommendations and conclusions. The chapter is mainly meant to deepen the reform of Rural Credit Cooperatives,the problems encountered and the further development of the direction of reform put forward its own policy proposals,and concluded by the points and surfaces.Compared with the related research, the article may has the following contributions:(1)The article evaluate from A Rural Commercial Bank’s ownership structure and corporate governance, the level of risk management, profitability and agriculture services before and after the adoption of reform. The existing articles only evaluate the performance of each Rural Credit Cooperatives(the predecessor of A Rural Commercial Bank)from2003to2008.(2)The lack of complete information dynamic game model to analyze the relationship between the profitability goal and support agriculture goal after the joint-stock reform of Rural Credit Cooperatives will be innovative.Compared with the related researches, the article may has the following shortages:(1) Because A Rural Commercial Bank has joint-stock reform for less than two years, the reform of the impaction may not fully reflect.(2) The change in the performance of A Rural Commercial Bank may be constituted by a variety of factors. The joint-stock reform is just one of the major factors.(3) Since I have difficulty in collecting the financial data. I could not use econometric to analyzing the performance of the joint-stock reform of Rural Credit Cooperatives quantitative.I hope the related issues and the corresponding solutions in this article can have a modest contribution to A Rural Commercial Bank.