Since the late 1990s, the growth rate of farmers' income in China has begun to fall while the gap between urban and rural income is increasing yearly. China continues to have a rural population of more than 100 million whose daily per capita cost of living is less than USD 1 and who are classified as being in the impoverished stratum. Chinese leaders have clearly advocated the further promotion of rural development and the reduction of poverty so as to realise the long-term goal of establishing a well-to-do society. The realisation of these goals is inseparable from support for rural finance. Currently, the channels for rural investment in China include investment by individual peasants, investment through government budget channels, investment from banking channels and funds directly from foreign capital and the stock market. This report gives a concise introduction to the sources and use of rural investment in China, with the emphasis of the discussion on the main problems and the direction of policy development from now onwards. Research has shown that the total amount of government budget on agriculture and the countryside is still low and that there are many irrational points in its rural investment structure. The amount of support for rural credit is insufficient, the internal credit structure of rural financial institutions is unbalanced and peasant households have great difficulty in obtaining loans from financial institutions. Agricultural insurance is contracting and is far from meeting the requirements of agricultural development. The creation of a good environment for investment in China is tied to a further increase in the government's budget for agriculture with the creation of stable investment channels to support this sector. The use of government budget funds should be adjusted in accordance with the need to set up a public financial system. The reform and renewal of rural finance should be promoted and financial services to peasant households and small and medium-sized enterprises in the countryside should be improved. Guidance by government investment should be fostered and a pluralistic agricultural investment structure should gradually be established.
展开▼
