Wokai Blog: Rural Finance in China's Poverty-stricken Areas: Balancing Government and Market

If you have some time on your hands and are very interested in the landscape of rural finance in China, take a look at this report compiled by a star group of China microfinance researchers and experts.

About the authors:

Zhang Xuechun, PhD in Economics, Research Bureau, People’s Bank of China. Prior to joining the People’s Bank of China, Zhang Xuechun worked for the Asian Development Bank, the International Monetary Fund, the Federal Deposit Insurance Corporation, and the Federal Reserve Board in various positions. She has extensive research experience on rural and microfinance issues.

Xu Zhong, PhD in Economics, Senior Research Fellow and Deputy Director General, Finan- cial Market Department, People’s Bank of China. Xu Zhong has been engaged in rural and microfinance policy making and research for more than 15 years. Shen Minggao, PhD in Economics, Economist at Citibank, and adjunct professor at the China Center for Economic Research, Peking University. Shen Minggao has a long-term interest in rural finance research.

Cheng Enjiang, PhD in Economics, Professorial Fellow, International Poverty Research Cen- ter in the People’s Republic of China. Cheng Enjiang is an adjunct professor at the Zhejiang University, and has been involved in rural finance research for more than 15 years. He has also worked as an international consultant for various international agencies.

This report highlights the issues in the PRC rural finance market, particularly the reasons for recent reform measures and key market and institutional changes. It also emphasizes on the need for a bottom-up approach in rural financial market development to meet local demand and adapt to local financial risk profiles. Since, effective supervision of rural financial market participants requires effective communication between government and the market, opening the rural financial market will allow innovative approaches and different types of institutions to compete, thereby ensuring better services and higher efficiencies.

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