Research On The Financial Support In The Development Of Rural Economy In China

Economic development decides the degree of financial development, economic development is restricted by the situation of financial development. The discussion on relationship between Finance and Economic Development were traced back to the beginning of last century. A large number of studies show that perfect financial market can disperse risk, reduce transaction costs, improve resource allocation efficiency. In modern financial theory, financial is crucial to the development of the economy, and has become the decisive factor of economic development.The development of rural economy cannot do without the support of rural finance. For a long time,due to the government’s financial regulation in rural areas and the weakness of the agriculture itself,rural finance has not well developed. Although the government has been increasing the financial input in agriculture, the effect is not good. Judging from the current situation, a large number of rural capital flows to non-agricultural areas, making the rural area "blood ischemic" more serious. The main reason is imperfect rural financial market. Agricultural bank, under the principle of commercialized operation has largely cut off its rural branches. Agriculture Development Bank focus on oil and other agricultural products purchase. Although the rural credit union covers vast rural areas, the loan difficult question is still not solved. Folk financial mechanism plays a big role, but it is not legally recognized yet. The existence of rural financial repression hampered the development of rural finance, so as to restrict the growth of the rural economy. The fundamental reasons for the above-mentioned problems is China’s dual economic structure and current financial structure. How to relieve the problem of China’s rural financial suppression and improve the rural financial system is the target of this research.This study established on the basis of predecessors. Firstly, the theory of financial development and rural financial market theory was carried out, and then introduced the development process of China’s rural finance. From the perspective of supply and demand of rural financial market, analyzed the present situations and problems existing in current financial development in rural areas of China. Finally, according to the experience of other countries in the development of rural finance, the paper provides some corresponding countermeasures and suggestions.This text thinks, ability of rural financial support to agriculture of our country is limited and the development of rural financial market still has a lot of problems. China’s rural financial market is limited to the credit market, stock market and insurance market is still not established. Secondly, there is no clear standard to define the responsibility of the financial institution. Lastly, inform finance made a great contribution to the rural economy, but its status has not been recognized by the government, which cause many problems. Last chapter of this paper introduces some successful cases, expecting to give some help to our country’s rural financial market. China’s rural financial market has many problems, but there is still much room for development. How to play the role of rural financial and achieve the rapid development of the rural economy is an urgent problems to be solved.