New-type cooperative finance is the core and source of strength for rural reform

2014 was the first year of China's Xi-era reforms, and the central government clearly put forward reform requirements for developing new-type rural cooperative financial organizations, requiring us to raise awareness and unify thinking, do our theoretical homework and prepare for research, and welcome the arrival of a new era of cooperative finance. General Secretary Xi Jinping pointed out: the rural finance problem is still a long-standing and difficult one, and to solve it we must work hard on the top-level systems and mechanisms, encourage pilot trials of farmers' cooperative finance, promote the positive interaction and organic combination of top-level design and grassroots exploration, and build a new financial system suited to agricultural and rural development.

I. The important position and role of new-type rural cooperative financial organizations

Developing new-type rural cooperative financial organizations is the foundation for building a new-type rural financial system. Theoretically, it is precisely because there are no community-based cooperative financial organizations with farmers as the main body that China's rural financial system has not been built up; in practice, China has only a nominal cooperative finance - rural credit cooperatives, whose nature has long since degenerated into commercial finance, which determines that the current rural financial system is difficult to adapt to the development requirements of agriculture and rural areas. In fact, China's rural cooperative financial organizations are still in a blank area, which determines that rural savings resources can only be allocated to cities through commercial financial organizations, and rural savings cannot be used for community development, accelerating the outflow of rural funds, which in turn drives the forced transfer of labor, turning rural areas into areas of the 386199 population, and causing even more serious "three rural" problems. To solve the "three rural" problems, we must accelerate the development of new-type rural cooperative financial organizations and lay a solid foundation for a new-type rural financial system. This is the only and correct direction and path of reform.

Developing new-type rural cooperative financial organizations is the core of building a new-type agricultural management system. With the development of the market economy, a single rural household management system is difficult to participate in market competition and cooperation, manifesting as the contradiction between small production and the large market, and small production in the large market is at risk of bankruptcy at any time. For a long time, our policy has advocated: a two-tier management system based on household contract management and combining unified and separate operations, but the cooperative and joint management system and mechanism have not been established. Reflecting on this problem, apart from the lack of systematic and supporting policies, more importantly there has been a problem in the direction of rural financial reform: the new-type rural cooperative financial system was not reconstructed as an important component of the agricultural management system, but instead cooperative financial development was resisted and commercial finance was supported in entering rural areas, further promoting the bankruptcy of the small peasant economy through the hand of commercial finance, eliminating the basic unit for building a new-type agricultural management system, and committing the directional error of counter-reform in which rural funds flow into cities and urban commercial capital flows into the countryside. New-type rural cooperative financial organizations are the core of the rural economy. We must understand the importance and urgency of developing new-type rural cooperative finance from the height of production relations, and firmly grasp the core of new-type rural cooperative financial reform, so as to promote the establishment of a new-type agricultural management system that adapts to the development requirements of the market economy.

Developing new-type rural cooperative financial organizations is the bond for building new-type rural production relations. The relations between farmers and farmers, between agriculture and the market, and between rural areas and the government are the basic relations of the three rural issues, namely the "three major relations." If the "three major relations" are adjusted and developed well, the "three rural problems" can be solved; otherwise the problems will only become more and more serious, and the subversive directional error of reform will be committed. This is a matter of understanding, and even more a matter of practice. How to handle the "three major relations" well must be understood from the height of adjusting and improving rural production relations, and must start from the new-type cooperative financial bond that links the "three major relations," firmly grasping the golden key to solving the "three rural problems" - developing new-type rural cooperative financial organizations, and promoting the adjustment of the relations between farmers and farmers, farmers and the market, and farmers and the government. Deng Xiaoping said: finance is the core of the modern economy; if finance is handled well, one move activates the whole game and the whole board comes alive. The author believes that if cooperative finance is handled well, then the three major rural relations will be adjusted and improved, and the harmonious development of rural social production relations, the mutual-aid development of urban-rural relations, and the sound development of the economic base and superstructure will be achieved.

II. Building a new-type rural cooperative financial organization system with complete functions

Accelerate the building of a county-level new-type rural cooperative financial system. (1) Federation organizational system. New-type community (village, township) rural mutual fund organizations are the basic units, maintaining independent legal person status and establishing cooperative financial organizations that bear their own risks. This is a necessary condition for building a county-level new-type rural cooperative financial organization system. After cooperative financial organizations are fully developed in each community, these standardized and well-operated new-type cooperative financial organizations initiate the establishment of a county-level federation, which is an independent legal person, owned by all new-type cooperative financial organizations, and authorized by the general assembly of members to exercise industry management, audit self-discipline, fund adjustment, government coordination and other duties over each member organization. (2) Comprehensive business system. New-type cooperative financial organizations are allowed, under conditions of prudent operation, to carry out banking, trust, insurance, securities and other businesses, giving full play to the combined effects of financial instruments and promoting financial development and preventing financial risks. (3) Education and training system. Guide new-type cooperative financial organizations in self-learning and in carrying out new-type cooperative financial training and education, encourage qualified institutions and personnel in society to train and coach new-type rural cooperative financial organizations, and support experience-exchange activities in which new-type cooperative financial organizations go out and invite others in.

Accelerate the building of a supporting policy support system for new-type rural cooperative financial organizations. (1) Market supervision system. Formulate as soon as possible supervision measures that conform to legal and financial prudential requirements, meet market demand, and can reflect the essence and laws of the cooperative financial system, unify new-type cooperative financial supervision standards, implement the main body of supervision, improve the quality of supervisors, and improve supervision service capacity and level. Establish a three-tier supervision system based on member self-discipline, with industry audit as the core and administrative supervision as the guarantee, which must both effectively supervise, maintain good market order, and protect the interests of member depositors, and reduce social supervision costs and maximize the saving of wasted social supervision resources. (2) Monetary policy support system. The central bank should formulate measures to provide working capital loan support to new-type rural cooperative financial organizations; financial regulatory institutions should guide commercial financial institutions to wholesale funds to new-type cooperative financial organizations; and a certain proportion of rural deposits absorbed by commercial banks should be used to purchase financial bonds issued by new-type cooperative financial organizations. (3) Fiscal system support. Provide support for startup costs of new-type rural cooperative financial organizations, tax reduction and exemption support, loan interest subsidies, and income-based subsidies for cooperative financial organizations, so as to jointly bear agricultural market risks and natural risks. Funds for fiscal support of rural projects should be issued through relending by new-type cooperative financial organizations.

Establish an organizational system for preventing regional and systemic risks in new-type rural cooperative finance. Support new-type rural cooperative financial organizations in carrying out mutual assistance insurance to prevent the occurrence of regional risks caused by force majeure factors, such as liquidity payment risks arising from non-institutional causes such as earthquakes, floods, and epidemics; support the establishment of a new-type rural cooperative financial stability fund to prevent and handle payment risks that individual new-type cooperative financial organizations may generate due to insufficient liquidity, which may in turn cause regional and systemic risks. The stability fund funded by government finance should be no less than 10% of the total cooperative financial stability fund, and more market measures should be adopted, reducing or avoiding administrative rescue. Each province should establish a new-type cooperative financial stability fund management committee, whose chairman is recommended by the members and appointed by the provincial governor.

III. Reform must rely on the strength of the people to proceed

The farmer masses are the source of strength for promoting comprehensive deepening of rural reform. Comprehensively deepening rural reform involves every aspect, with much content and complex situations, and the accumulated contradictions and problems cannot be solved simply by trying to grasp everything at once; the interest game of reform is becoming increasingly intense, and the ignition point of contradictions has reached the lowest level. Reflecting on the causes of the problems, it is that in more than thirty years of reform the farmers have had no voice, and farmers have not become the main body and beneficiary group of reform. Since the 18th National Congress, the Party Central Committee headed by General Secretary Xi Jinping has adhered to the mass line, relied on the strength of the people to promote various reforms, formed a broad consensus in society for promoting reform, and the people have become the main force of reform and participated in the new reform; comprehensively deepening reform has not only ensured the correct direction of reform, but also gathered the source of strength for reform. Reform must rely on the masses, and the fruits of reform must benefit the masses; it cannot be mere verbal promises without real benefits, and it cannot oppose the people in the name of reform. The author believes this is the reform consensus formed since the 18th National Congress.

The main body of new-type rural cooperative finance is farmers, and it is a production relation that ensures the fruits of reform interests benefit hundreds of millions of people. Developing new-type rural cooperative financial organizations is a great change in rural production relations. By improving the organizational level of farmers' credit and using financial leverage to pry forward various rural reforms, we can achieve twice the result with half the effort, and can reduce resistance from all sides and achieve the greatest common denominator in society. Developing new-type rural cooperative financial organizations can organize scattered farmers through the public instrument of finance, making them the main body and beneficiary of reform, and is the overall lever for reviving rural civilization and fostering friendly and healthy cities. Deng Xiaoping pointed out: as for what form of rural production relations is good, it depends on whether farmers support it and agree to it. Once new-type rural cooperative financial organizations were put into practice, they won the support and response of the broad masses; farmers' property income is growing, production is developing again, and returning to the countryside to start businesses and find employment is increasing. This confirms that the cause of cooperative finance is a noble cause that seeks welfare for the majority of people, and is a production relation representing the interests of the broadest masses of the people.

New-type rural cooperative finance can comprehensively promote the development of various rural undertakings. New-type rural cooperative financial organizations are both a component of the rural financial system and a component of the rural economic system, and are located at the intersection of the rural financial system and the rural economic system, so they have a natural dual attribute. On the one hand, cooperative finance participates in market competition and cooperation as a market entity; on the other hand, as a rural economic body it belongs to the main body of fiscal support; cooperative finance can act as an investment entity to support industrial development, and can also support consumption demand through finance to drive the development of investment entities; cooperative finance makes the economy and finance twins in one, like enterprise groups and finance companies, creating supply with one hand and creating demand with the other; cooperative finance can operate with debt and also manage assets, and can use financial leverage to support investment and consumption to promote economic development, and can also use economic dividends to fight poverty and develop various social undertakings; cooperative finance is the full development of individual freedom, and also a form of realization of the collective economy; cooperative finance can go fast alone, and can also go far together through union; cooperative finance can mobilize the concentration of internal savings, and can also gather external resources to the countryside; cooperative finance can raise the status of small production, and can also transform large social capital. In short, once the production relation of cooperative finance develops, it will certainly comprehensively promote the development of various social undertakings such as the rural economy.