By Cheng Yu, Research Team on “Institutional Framework and Policy System for Urban and Rural Integration Development”, Research Department of Rural Economy, DRC

Research Report, No.75, 2019 (Total 5575) 2019-5-21

Abstract: In the context of long-term imbalance of urban and rural development, the allocation of market-oriented financial resources will stimulate the outflow of funds from rural areas. China’s continued rural finance reform has achieved certain results, but it failed to touch the fundamental constraints of the supply system. The respective functions of commercial finance, cooperative finance, and policy finance are still not fully realized. The agricultural credit policy lacks incentives and supervision. It is impossible to solve the problem of “reverse” configuration of urban and rural financial resources. To promote rural revitalization, it is necessary to guarantee the priority investment in agriculture and rural areas. It is urgent to promote supply-side reform of rural finance, and invest financial resources in agriculture and rural areas guided by policy mechanisms. In order to establish a policy mechanism for guiding the return of capital to support agricultural and rural development, we need to collaboratively promote the remodeling of the policy-oriented financial strategy, strengthen incentives and supervision on supporting and serving agriculture, enhance the organic integration of formal and informal finance, give a full play to the leading role of government funds, and activate agricultural capital markets.

Key words: rural finance, supply-side reform, rural revitalization, policy mechanism