Market-oriented Approaches to Rural Collective Asset Management under the New Situation

At the end of September this year, the fifth meeting of the Central Leading Group for Comprehensively Deepening Reform deliberated and approved the pilot program on farmer share cooperation and the reform of share rights and powers of rural collective assets, proposing to “actively explore effective forms of realizing collective ownership, continuously strengthen the strength of the collective economy, and continuously increase farmers' property income”. How to take marketization as the direction and property rights reform as the focus in the future, accelerate the promotion of institutional reform and mechanism innovation, stimulate the internal vitality of the rural collective economy, gradually explore effective forms of realizing the collective economy under market economy conditions, and safeguard and realize farmers' property rights, is a very urgent task for us at present.

The Current Situation and Dilemma of Rural Collective Asset Management

In recent years, the development of China's rural collective economy has encountered a bottleneck, and collective asset management has generally fallen into a dilemma, specifically manifested in the following aspects:

(1) Insufficient specialization and market-oriented capacity of farmers. At present, farmers face two asymmetries in dealing with the market: the first asymmetry is information asymmetry, that is, compared with general market entities, farmers are obviously insufficient in possessing and obtaining information, and also have a great disadvantage in accurately analyzing and judging market information; the second asymmetry is capacity asymmetry, that is, compared with general market entities, farmers are insufficient in mastering and applying market rules, carrying out specialized business operations, adapting to market changes, and promptly carrying out reform and innovation.

(2) Imperfect internal governance structure of the collective economy. Under market economy conditions, the collective economy generally shows inadaptability in the following four aspects: first, the government and the collective are not separated. There is overlap of personnel between Party and government posts and village cooperative management posts, finances are not separated, and village affairs and cooperative affairs are confused, seriously deviating from the requirements of modern corporate governance. Second, property rights are unclear. Property rights reform generally lacks depth, and resource-based assets have basically not been included in the reform. Third, the management mechanism is imperfect. The village collective asset operation and management system is still imperfect, and the democratic decision-making mechanism for major matters, information disclosure mechanism, and financial audit mechanism have not been well implemented. Finally, powers and responsibilities are unclear. The powers and responsibilities of cooperative managers are not unified, and there is a lack of mechanisms for accountability and operational incentives.

(3) Failure of internal supervision and inadequate external regulation. The general failure of the supervision mechanism is mainly reflected in two aspects: on the one hand, internal supervision fails. Due to the influence of unscientific management mechanisms, unclear property rights, and China's rural governance traditions, internal supervision institutional mechanisms such as information disclosure, democratic supervision, and democratic decision-making are generally mere formalities. On the other hand, external supervision is inadequate. Although the agricultural authorities have obtained institutional recognition and possess administrative power, the path of strengthening regulation by strengthening government administrative power is unworkable; as the rural collective asset management departments, the economic management departments at all levels, although bearing specific regulatory responsibilities, do not have corresponding law enforcement authority, resulting in a decline in management authority and weak management.

(4) The dual system hinders rural resource-based assets from entering the market. Under the dual system, rural resource-based assets with land at the core are strictly restricted in development and utilization, which makes it difficult for land to achieve efficient and intensive use and scientific market operation because it cannot effectively connect with other market factors, resulting in farmers being unable to fully enjoy land returns. Specifically with regard to collective asset operation and management, land, as the largest collective asset, has had its value potential suppressed by the dual system for a long time, and resource-based assets such as collective land, especially collective operating construction land, can neither be mortgaged, guaranteed, nor used as shares, nor enter the market, resulting in the strange phenomenon of a considerable number of collective economic organizations "sitting on a huge collective land asset while struggling to operate," "holding a golden bowl and begging for food."

(5) Departmental interests and fragmented division hinder the discovery of the market value of collective resource assets. From the vertical perspective, at present agriculture, economic management, landscaping, and even water affairs are more or less involved in the management functions of collective assets. Taking property rights reform as an example, because the assets involved separately involve the agriculture and forestry departments, although they all belong to collective assets, forest rights reform and collective property rights reform must be carried out separately, and the departments actually operating both reforms are both economic management departments. From the horizontal perspective, because collective ownership still follows the basic management system of the people's commune period of “three levels of ownership, with the team as the basis,” circulation among the assets owned by various collective economic organizations is not allowed, and the economic management departments of each township are only responsible for the supervision of collective assets within the scope of their own township. Cross-regional integration and coordinated use of collective assets is simply impossible, and unified, standardized, market-oriented supervision is even more difficult to implement.

(6) Poor asset liquidity and an excessively high proportion of non-performing assets have become chronic problems. Rural collective assets currently generally suffer from problems of poor operating efficiency, a high proportion of non-performing assets, and poor asset liquidity. It is worth noting that in recent years, in order to prevent cadres from abusing power and embezzlement, townships in various places have strengthened supervision and formulated very harsh collective fund use management systems, resulting in normal collective reinvestment being unable to proceed normally, and in fact managing collective assets to death. The combined effect of multiple causes leads to the final result of low operating efficiency of collective assets.