Explore Joint-stock Reform Of Rural Credit Cooperatives

To clarify property rights relation and to improve corporate governance is an important task and a main target for the reform of rural credit cooperatives. But the choice of a specific property right system remains as an open question over years. The provincial association, a model which has been operated for more10years, has played a critical role at the early stage in promoting the rapid development of the rural credit cooperatives. Nonetheless it is inappropriately positioned and hampers the business as the development of market economy and the improvement of legal system. The contradiction between administration model and property rights system is criticized by experts.Focusing on the research of rural credit cooperatives, the author analyzed problems emerged in the process of reform, pointed out main cause as the mismatch between administration model and property right system, and concluded that the reform on administration model should be implemented in order to improve the property right system.After comparing and analyzing five administration models of provincial rural credit cooperatives, the author suggested that the best and practical choice to straighten out the relation between administration models and property rights system would be establishing Shandong Rural Commercial Bank. The author also assessed the feasibility of the establishment of the bank from two aspects:market admittance conditions and outer environments. Meanwhile, after the author analyzed the founding models of Chongqing Rural Commercial Bank and Ningxia Huanghe Rural Commercial Bank, a specific solution had been introduced:the provincial association and some well-performed rural credit cooperatives establish one unified corporation, Shandong rural commercial bank, under the premise of appraisal of the assets and seek to merger other under-performed rural credit cooperatives.For specific share allocation, the author suggested a frame structure of state-owned shares, corporate shares, public shares, and employee shares based on the analysis of those rural commercial banks which have complete shareholding reform and proposed an all-member employee stock ownership plan, which would exceed the20%limit for employee shares, to encourage the initiatives and avoid moral hazards.