Aba Rural Credit Cooperatives Unified Corporate Governance Case Study

At present, Chinese banking system is composed of the People’s Bank of China as central bank, policy Banks, commercial Banks and rural credit cooperatives, etc. The rural credit cooperatives as an important part of our country’s financial system, shoulder to provide financial services for farmers, agriculture and rural development. Because of its large number of organizations and wide covering area, the rural credit cooperatives become the main force of rural finance in China and an intimate financial bond with the "agriculture, rural areas and farmers". But with the deepening development of China’s economy, there appear to more and more new problems in the rural credit cooperatives which like its management system, business model, the contents and methods of service, etc. 2003, China initiated reform of rural credit cooperatives, taking market as orientation, and its purpose is to service for three rural. The reform has achieved positive outcomes such as rural credit cooperatives to honor the part of central bank bills, improved financial strength, and increased capacity to support the "agriculture, rural areas and farmers". However, there are still some issues need to be solved like unclear property rights and contradiction of independent legal entities status that caused the owner absence, unreasonable and imperfect corporate governance structure, lack of role of directorate, weak controlling of the companies and outside supervising, etc. And these issues greatly affected the development of risk prevention for rural credit cooperatives, also restricted the healthy and sustainable development of rural economy. Development and reform of rural credit cooperatives is a long-term high attention by the CPC Central Committee and the State Council, as introduced in August 2004 the “The opinions about further deepening the pilot reform of rural credit cooperatives from general office of the State Council”,a new round of nationwide rural credit cooperatives reform unfolds. This reform focus on property right system and management system reform, especially the reform of property right system, and the target of this reform is to realize the checks and balances between and among decision-making, management, supervision, and set up the operation mechanism for incentive and constraint in combination with each other. For get a better solution for the problem existing in the corporate governance structure, formed in line with the modern enterprise operation rules of corporate governance structure, set up the management mechanism for clear property rights, capital sufficient and sustainable development of financial. And makes rural credit cooperatives can be as a market subject which could can really independent operation, self-discipline, self-development and at their own risk. Make sure rural credit cooperatives as local financial institutions could renders real service to "three rural". These are the current concern.The key to solve the issues of "agriculture, rural areas and farmers" is to achieve the overall balance and sustainable development of the national economy. The development of agriculture and rural economy and increase farmers’ income always need financial support. Rural credit cooperatives as the mainstay of rural financial, play an important role in supporting local economic development. China’s rural credit cooperatives has experienced reforms many times in different economic times, while acknowledging reform achievements, we must be clearly aware the problem: unclear property rights, imperfect corporate governance structure, etc. So now, to establish effective corporate governance of rural credit cooperatives is the top priority, is also a focus of this reform in the future.This dissertation is in this context, based on the theory of corporate governance, through the study of Aba’s rural credit cooperatives typical cases of the unified corporate governance to analyze, reveal the choices appropriate to property right system of rural credit cooperatives from the different areas, puts forward some suggestions of further improve the corporate governance of rural credit cooperatives, and trying to find out the practical corporate governance structure in undeveloped areas, especially in ethnic minority areas. This dissertation research results have certain reference significance for other corporate governance of rural credit cooperatives in other undeveloped areas in our country.