Evolution of Rural Financial Market in China: An Institutional "Lock in" or Gradualism?

Historically, China's political attempts to provide access to rural credit has met with mixed results and an institutional structure that often strays from intended policy goals. There has been a close correspondence between financial depression and many policy-driven financial institutions that dominated the rural financial system in China. More recently, ongoing reforms are dedicated towards a gradual liberalization within the system. In this study, we explore the context of agricultural transition and political process as defined by the various interlinkages across the Chinese rural financial system. We find that there has been negligible progress in the evolution of the rural financial market in China. The policy-led financial institutions ended up as merely a disbursement window and a costly drain on state budget. Institutional changes were locked in by patching up the existing institutions.

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Conference Paper/ Presentation
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JEL Codes:
E44; N25; D72; Q14
Series Statement:
Poster Paper

 Record created 2017-04-01, last modified 2018-01-22

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