Chapter 8 Chapter 6 Rural China: A Difficult Problem

China's 678,589 villages still worry the country.It is home to a huge community, if not the vast majority, and home to millions of returning migrant workers.We already know that the overall situation in the countryside took a big step back in the 1990s.At the beginning of the current government's administration, the agricultural issue will be the top priority, and the investment in agriculture will be greatly increased.In recent years, the income of farmers has been significantly increased, mainly reflected in the income remitted by migrant workers.For those who remain in the countryside, the main thing that can significantly change their quality of life is the quality of rural public services, including rural schools, clinics, agricultural infrastructure (irrigation, electricity, telephone lines, etc.), and the level of charges for these services .Continually improving the quality of these services and ensuring they are charged reasonably are critical to improving the quality of life in rural areas.Only when the rural areas have perfect infrastructure can a major problem facing China be properly resolved.

In this chapter, I will observe the quality of life in rural China from four perspectives. First, with the help of Cai Xiaoli, a professor of political science at the Massachusetts Institute of Technology, we will analyze why there are such big differences in rural infrastructure construction in different places.When she visited rural China a few years ago, she made some startling discoveries.We will explain in detail later on the relationship between the revival of temples and clans in the countryside and the improvement of rural infrastructure. Second, let's take a look at how the government plans to invest in rural areas. One reason for the emergence of rural problems in the 1990s was the failure of the fiscal system for delivering social services.Since entering the new century, the state has increased investment in rural areas.Special research by Oxford University Christine Wong and World Bank scholar Achim Fock will be highlighted here.

Third, we will explore the progress of rural health insurance with Phillip Brown of Colby College in the United States.The government has done a lot of work to expand the number of participants in the new rural medical cooperative insurance, and has increased financial investment many times, but the challenges in this area are still arduous. Fourth, let's go back to Xinjiang and look at the development of rural financial institutions that the Chinese government is vigorously encouraging to enable farmers to obtain more and better financial services.Fostering local financial services so that people help themselves is the most sustainable model for rural economic development.So far, the effect of rural financial construction is not obvious. At the end of this chapter, I will list three suggestions put forward by experts.

People living in villages need village cadres to manage many daily affairs, from sewage discharge in the village to medical insurance for villagers.But despite their onerous responsibilities, village-level administrations do not have any formal authority to collect taxes or formulate policies.This is determined by the composition of China's administrative machinery - local officials have to provide all important public services, while it is their higher authorities who collect taxes, distribute funds and formulate policy.The composition of China's administrative structure is similar to a pyramid. This does not mean that village cadres have no power-they do have power, but most of the powers in their hands are not granted by law (and sometimes abused).

In the initial stage of the reform, even before the reform, all public services in the villages were in charge of themselves, and the higher-level agencies did not care.The village builds roads and bridges by itself, and builds and maintains irrigation and drinking water systems. The village's primary school and health center are also funded by the village itself.These fortifications basically rely on villagers' voluntary labor and donated materials to complete.Basic education and health centers also rely on non-tax revenues, materials and labor donated by villagers.Townships do things similar to villages, building larger schools by themselves, connecting roads between villages, and so on.The next higher county has similar responsibilities within its jurisdiction.Each level of government is funded to do these things by the various funds it collects locally.The problem arose in the 1980s when local governments invested in setting up factories, and the funds for public services were squeezed out, and there were no other sources of funds to supplement them.The village at the bottom of the pyramid has become the biggest victim.

Figuring out how money flows through China's various levels of government is a lifelong challenge and is so complex that few other than the Ministry of Finance seem to be able to figure it out.Roughly speaking, in a very crude way: the central government receives taxes and other revenues, which are then distributed among the provinces. In 2008, the total amount of transfer payments was 869 billion yuan, in addition to 997 billion yuan of special transfer payments allocated by the central government to local governments (mostly for specified purposes).This means that close to half of all funding sources for local governments come directly from the central government.Provincial governments then distribute the funds (after deducting a certain amount) according to the type of expenditure to prefectures, which in turn distribute to counties, and so on.The lower the position in the administrative pyramid, the less funds are allocated.

Thus, while most of the tax revenue goes to the central treasury, the local government (including all levels of government from province to village) bears 70% of all expenditures (including 60% of education expenditures and 40% of health care expenditures).In terms of spending responsibilities undertaken by local governments, China is the most decentralized country in the world.In most other countries, the central government bears most of the spending burden.China's system can still function well if the transfer system distributes funds smoothly and efficiently across the country. But the problem is that the existing transfer payment system doesn't do that, or at least it hasn't for most of the past 10 years.To date, this problem is only half solved. In 1994, then Premier Zhu Rongji carried out major reforms to the national taxation and fiscal system, and introduced value-added tax at the same time.This new fiscal and taxation system, known as the "tax-sharing system," ensured that the central government received most of the tax revenue. This reform fundamentally saved the crumbling central fiscal system.Before the tax reform, the central government’s total revenue as a percentage of GDP had dropped to 11%, but it began to rise after the reform.The current official figure for central government revenue as a share of GDP is 20%, and it would be higher if all other revenues were included.It is close to the proportion of US government revenue in GDP exceeding 30% (this ratio in European countries is generally 40% to 50%. Of course, the level of social welfare protection provided by the US government is not as high as in European countries).Unfortunately, the reform of the tax-sharing system has made the financial situation of counties, townships and villages more tense, and the proportion of the revenue of these three levels of grassroots governments in the total government revenue has dropped from 30% in 1992 to 17% in 2004/2005~ 18%, while the expenditure they have to bear in the same period still accounts for 28% to 29% of the total expenditure.That is, they have to do as much with fewer resources.

One of the problems is that grassroots governments in rural areas do not get much of the value-added tax.VAT is firmly in the hands of higher levels of government.The village was the most affected, and the few remaining taxes were taken away by the higher-level government.The few benefits that villages and townships enjoy may be that the county and central government have increased investment in basic education in rural areas, which has slightly reduced their burden, but overall, the financial situation in rural areas is very bad.A 2000 study by the State Administration of Taxation estimated that township governments received only 185 billion yuan in transfer payments from higher-level governments, half of what they raised.To make up for the funding gap, governments at all levels in rural areas have legally collected 86 billion yuan in various fees, 40 billion yuan in arbitrary fees, forced villagers to work voluntarily, and actually collected about 56 billion yuan in disguised taxes.From this, you can draw such a picture. Before 2000, the local government had to find its own way to find funds, and the local people had to live under the heavy burden of arbitrary fees and apportionments.

The reform of the fiscal system in 1994 created enormous pressure on the already tense rural finances.To cope with this situation, villages, townships, and counties sell land use rights and buildings on the ground, and use the land as collateral to apply for loans from local banks (this is actually illegal).Research conducted by economist Yu Jianrong in early 2000 showed that the average debt of township-level governments reached 11 million yuan, mainly due to investment in local industries (usually due to lack of overall consideration and planning, most of which unfortunately ended in losses and bankruptcy) , wages owed by public institutions and debts owed to maintain the operation of local social services.According to a study jointly conducted by the World Bank and the National Development and Reform Commission, 80% to 90% of the total infrastructure construction expenditure of local governments below the provincial level may be financed by bank loans.They estimated that in 2004, the amount of loans each villager had to bear rose to 250 yuan, which meant that the scale of national village-level debts reached 240 billion yuan that year, accounting for about 1.5% of GDP that year.

Wang Mei, an economist at the World Bank, used data from 57 counties to estimate that the total debt of county-level governments in 2004 was 14 percent of GDP.Those figures are likely to be higher today.No one really knows how serious the local debt problem is, but it is entirely possible that local government debt accounts for 10% to 20% of GDP. Local governments have no choice but to rely on all kinds of reserves and overall planning collected by themselves. A regulation promulgated by the State Council in 1993 stipulated that farmers should not exceed 5% of the per capita net income of farmers in the previous year.But this rule is often ignored (or reported per capita income figures are inflated in order to raise taxes collected).By the end of the 1990s, there was a poignant and heavy atmosphere in the Chinese countryside, and many farmers were overwhelmed by various legal and illegal taxes (no one could say which ones were legal and which ones were legal). It is unreasonable and unfounded, and there is no supervision by the higher-level government). In 2003, two Chinese journalists, Chen Guidi and Wu Chuntao, told some tragic stories in Anhui in a widely read documentary reportage. , People's Literature Publishing House, 2004.The English version of this book is Will the Boat Sink the Water? The Life of China's Peasants, 2006, Public Affairs.By the end of 1997, 46% of rural primary and junior high school education funds were borne by sources other than the government budget, mainly township pooling fees.According to Cai Xiaoli's data, 59% of village income in 2000 came from non-tax revenue.In short, the countryside suffers from financial depletion. The wealth created by the economic boom on the eastern seaboard in the 1990s was not shared where it was most needed.

Cai Xiaoli was very confused. Lily LTsai, Accountability Without Democracy: Solidary Groups and Public Goods Provision in Rural China, 2007, Cambridge University Press, in some villages she visited in the late 1990s, she saw wide and flat roads, well-equipped irrigation facilities and newly renovated New school buildings; in other villages she saw muddy roads, dry farmland and crumbling schools in the wind and rain.Why does this happen?She ponders the answer.If all villages have to finance their own facilities, why do some villages do well and provide decent public services while others do poorly?Is it because of income disparity, village committee elections, or differences in the abilities of village cadres? After carefully studying the data of more than 300 villages, she came to a startling conclusion.The level of public services provided by a village has nothing to do with its level of wealth. The level of public services provided by villages with similar per capita income levels varies greatly. This cannot be explained by the village elections that began in 1988 and spread across the country in 1998, nor can it be explained by Explained in terms of the quality of bureaucracy.Cai Xiaoli found that some ancient things caused the difference in the level of rural development today. Behind a village with better roads and educational facilities, the most significant factors are active temple activities, or village-wide clan organizations.In the past 30 years, these two types of traditional Chinese social organizations have revived in many villages.According to Cai Xiaoli's data, in 2000 44% of villages had some form of clan organization.Such organizations hold regular ceremonies and celebrations, while being deeply “embedded” in local social life, organizing donations, and carrying out small-scale construction projects, such as road repairs.Cai Xiaoli believes that such organizations are very active in local social life. If the abbot of the temple praises the excellent work of the local government, the latter will receive moral recognition and enjoy prestige among the villagers.In addition, public spirit also played a role.If farmers know that village cadres are also influenced (controlled) by some local NGOs (Non-Governmental Organizations), they will be more active in donating money and efforts.Cai Xiaoli found that the per capita public service expenditure of villages with a temple is 109 yuan, while the per capita public service expenditure of villages without temples is only 60 yuan.This is a very strange discovery, showing that rural life is not only economics and politics, but richer than money and power.Society also plays a role. But the country church did not have the same clout.Cai Xiaoli’s research found that village cadres are generally (model) party members and usually do not participate in Christian activities, which means that the church’s connection with the local public society and local party and government organs is relatively weak.At the same time, the church was often viewed with suspicion because of its ties to foreign institutions, so it never really stood out as an institution that could do much good in the minds of local officials. Cai Xiaoli made another disappointing finding that village elections did not result in any substantial changes in the quality of life in the villages, even though an average of 74 percent of village cadres in the villages she studied were elected.Why is this?One of the reasons is the limited motivation to be a village cadre.Some village cadres she interviewed thought that being a village cadre was very tiring, and they had to constantly fawn on the township government for money, deal with land disputes among villagers, and focus on family planning.How could such a thankless job especially attract capable people?Losing the election usually does not bring much loss. The former village cadres can easily switch to other livelihoods by virtue of the network resources (or financial resources) accumulated in the past.Moreover, the villagers cannot know the audit results of the village's financial accounts, and it is difficult for them to accurately assess whether the cadres they elect are clean or not.Nor do they have access to independent assessments of the fiscal performance of village cadres.Therefore, although the voters in the village have a general judgment on how well the village cadres are doing and how good they are, they have never been able to make a choice based on sufficient information.And, as Cai Xiaoli points out, there is also the risk of powerful local elites controlling the electoral boxes, and we do hear some instances of violent resistance against village cadres in everyday life. Another thing that doesn't seem to work very well is the bureaucracy itself.Officials at each level obtain annual work targets from the officials at the previous level.The achievement of these very specific goals, which are subdivided into many categories, determines their performance and future.Some are mandatory tasks (such as "one-vote veto" for family planning, mass violence incidents, etc.), and some are very important goals, such as tax revenue and the introduction of investment.Whether this kind of work is done well or not determines whether an official can be promoted quickly.There are also some less rigid goals such as road construction and medical services, which do not have much substantive significance in the annual assessment.At the same time, for the same reason, the township cadres who manage the village cadres do not pay much attention to the public services in their jurisdictions.This means that officials don't worry too much about such matters, and the relevant data reported may also be written randomly.Are things improving?More money is going to villages, which is good news.Cai Xiaoli recently participated in another large survey, and although the final analysis of the data has not yet been completed, the preliminary conclusions look good.What we already know is that the village has more roads, better irrigation, and lower tax burdens.There is evidence that more transfer payments from higher levels of government have flowed to villages through a mechanism known as “new socialist countryside construction,” although so far only some villages participating in the pilot program have benefited.With the abolition of various fees and agricultural taxes in the “Three Lifts and Five Unifications”, together with subsidies for grain cultivation and other subsidies, the real income of farmers has increased significantly since 2000.But perhaps the most significant reforms and hopes for improving the quality of life in rural areas will rest on health care and the New Rural Cooperative Medical System (hereinafter referred to as NCMS). The new rural medical system started in 2003, and 310 counties participated in the pilot.Insured individuals, local governments and the central government jointly raise medical insurance funds to subsidize individual medical expenses.At the beginning of the implementation, the minimum payment standard for individuals was 10 yuan, the local finance paid 20 to 40 yuan, and the central finance subsidized another 20 yuan for poor areas. At the end of 2007, a total of 685 million people were insured.Most outpatient diagnosis and treatment expenses are not included in the compensation, and large hospitalization expenses are partially compensated.At present, the NCMS has been rolled out across the country, covering all counties.In recent years, to the delight of the health sector, the coverage rate has been high.But a high participation rate does not ensure the success of the system—local governments may be tasked with enrolling everyone, but villagers have little choice. Philip Brown investigated the operation of NCMS in Anhui and Jiangsu.Brown wanted to make an accurate assessment of the effectiveness of the NCMS, but he was constrained by two factors: First, each county usually develops a cooperative medical plan according to its own needs and resources. , no two identical patterns were found.There is also a large gap in the reimbursement rate in various regions: in some places, migrants with non-local hukou are also included in the local rural cooperative medical care plan, while in some counties only the local population is included; when it is necessary to go to a higher-level medical institution for treatment, some counties require a referral certificates, while some counties do not require such certificates; wealthier county governments spend a larger proportion of funds in cooperative medical schemes; and central government subsidies vary widely across regions.Second, the selection of pilot areas was not random.According to Brown’s survey, the counties that participated in the pilot in the early stage were mostly areas with a relatively small population, relatively affluent, and relatively good medical infrastructure, while the conditions of the areas that participated in the later stage were relatively poor, which had some impact on the validity of the sample, as Economists say it is challenging to evaluate a non-random sample with such wide variance.However, due to the large sample size, it can make up for this defect to a certain extent. The research force of Brown and other institutions conducted a survey in 30 counties and interviewed 1,500 farmers, asking them whether they think the reimbursement process is too cumbersome, whether they have other types of insurance, what the actual reimbursement rate is, and whether they plan to participate in insurance in the future, etc. question.They concluded that a successful NCMS model includes the following factors: coverage of migrant populations, no need for referral certificates from hospitals, and high reimbursement rates. In some places, the reimbursement rate of the NCMS is very low.In some low-income and impoverished areas (due to lack of taxation, generally speaking, local finances are also very difficult), the maximum compensation amount is only 3,000 yuan, which is not enough to cover the average hospitalization cost of 5,000 yuan.In some places, only 10% to 20% of hospitalization expenses are reimbursed, which is less than the average reimbursement rate of 30% announced by the Ministry of Health.That is to say, at the current stage, the new rural medical system has not yet achieved the original intention of the designers: no longer allow the poor to become poor or return to poverty due to illness.Because the reimbursement rate is not high enough, some poor people can only stay at home and let the disease develop because they cannot seek medical advice when they unfortunately suffer from illness.This is a serious social problem. Shi Li, an economist at Tulane University in the United States who was a medical scientist, is conducting a survey on the implementation of NCMS in several counties in Weihai, Shandong Province. He pointed out some shortcomings of the system.He believes that "the central government treats guests, and the grassroots pays for it" is a major reason for the lack of financial support for the system.The central government requires local governments to implement the cooperative medical system regardless of capital investment, and only part of the funds will be provided. In 2007, the central government invested 11.4 billion yuan in NCMS, accounting for only 27% of the total funds raised.Shi Lizheng believes that the central government should pay for medical insurance, and local governments can share some of it. Perhaps farmers should not be asked to pay for it.In Weihai, the per capita outpatient expenditure is 13.6 yuan, which is almost equivalent to the individual payment standard.He worries that the premiums are worthless and could lead to high surrender rates.My guess is that most people would think of this as buying catastrophe insurance and not counting on it to cover day-to-day medical expenses.Shi Lizheng is worried that if healthy people do not participate, the cooperative medical system will end up underfunded.Shi Lizheng therefore questioned whether it is necessary to compel farmers to participate in insurance, at least for some groups of people.At present, it seems that there are more or less compulsory factors in participating in the insurance, so in my opinion, the current financing is not the main problem. Nevertheless, the new rural cooperative medical care is still very promising. The central government will further increase investment and require local finance to increase investment. Reached 40 yuan.As we analyzed before, the proportion of medical and health expenditure in GDP has risen to 0.8%, and with the rollout of the new rural medical system in a wider range, it will show a further upward trend.In another positive development, the central government quickly rolled out medical assistance programs for the poor.As of the end of 2007, 36 million people have benefited from this project, and funds worth 4.8 billion yuan will provide medical assistance to poor groups. Why are health issues so important?The reason is simple, health profoundly affects a person's future, especially for young people.Professor Yao Yang from the China Center for Economic Research at Peking University has done in-depth research on this. He focused on the issue of health shocks. He defined health shocks as diseases requiring hospitalization or medical expenses greater than 5,000 yuan.The annual income of many farmers is usually only a few thousand yuan.Yao Yang created a database that recorded in detail the education and disease occurrences of each individual in the sample during the 20 years from elementary school to their twenties.He found that one-third of the sample population experienced a health shock.Moreover, the data show that the younger the age at which a health shock occurs, the greater its impact.If a child suffers a health shock during primary school, there is a 10% to 16% probability that the child will not be able to enter secondary school, which happens to be a critical period for a child's growth.If a health shock is received in secondary school, the impact will be smaller.Yao Yang predicts that the reason for this negative impact lies in the money factor.A single health shock can deplete a family's entire savings, which means that parents can no longer afford to pay for their children's education, and stopping their studies is directly related to their children's future.Yao Yang believes that this problem can only be solved by continuously promoting free compulsory education (which is gradually being promoted) and ensuring the complete financial guarantee of the new rural medical care system.Solving such problems is the key to China's future development, because it determines the quality of life of the next generation, and also determines the future of China's economy.Only education can increase human capital.When China's economic growth can no longer rely on hardware facilities, it has to rely on software facilities - people themselves.If people are not educated enough, China will be in big trouble. The status of rural medical care, education, infrastructure and even pensions depends on whether funds are in place.As mentioned earlier, the reason for the rural decline in the 1990s was the extreme lack of rural funds.How is the situation now?Huang Peihua, a scholar at Oxford University, and Fu Anheng, an economist at the World Bank, guided us to understand the progress in this area in recent years. "Financing Rural Development for a Harmonious Society in China: Recent Reforms in Public Finance and Their Prospects", World Bank Policy Research Working Paper 4693, August 2008, we are about to see that things are basically good, but there are still gaps. In 1999, the rural tax and fee reform piloted in Anhui brought direct benefits to hundreds of millions of farmers.The abolition of agricultural tax has benefited tens of millions of farmers, and the government's agricultural investment has increased.But some expenditures are inefficient and wasteful, while a bloated bureaucracy continues to drain local finances. In recent years, the central government has carried out major reforms to the rural tax and fee system to cancel various non-tax revenues collected by local governments from farmers.The reform has successfully reduced the burden on farmers, but it has also exacerbated other potential problems (it is worth mentioning that the idea of ​​rural tax and fee reform was first proposed during Jiang Zhu’s administration and was piloted on a small scale. during the administration). In 1999, the reform of rural taxes and fees was piloted in Anhui, initially aiming to standardize the agricultural tax system, incorporate agricultural taxes and surcharges into the official revenue budget, and cancel village withdrawals, township pooling and other fees.In this way, farmers only need to pay one or two taxes, which is beneficial to resist various arbitrary charges imposed on farmers by local governments.Townships spread the message by posting notices here and there stating what taxes farmers only have to pay.This is a good thing for farmers, but it has also led to a decline in the village's fiscal revenue.Subsidies (estimated) from the central treasury account for only 35% of the lost tax revenue.As a result, the central government has mandated that government agencies be streamlined to reduce costs.However, as far as we know, the streamlining measures have not been well implemented.The result is a reduction in fiscal revenue, but no reduction in overall administrative costs. The second reform abolished the agricultural tax.The reform began in 2003 and ended in 2006. In 2003, only 33 billion yuan of agricultural tax was paid nationwide, accounting for 1.7% of the total tax revenue. Therefore, the abolition of agricultural tax does not mean a big loss to the central government.But for farmers who work hard all year round and only reap a few thousand yuan from the land, the significance of the reduction is huge.The income of farmers in many places has thus increased by 5% to 10%.But this reform also brought big problems.According to the estimates of Fu Anheng and Huang Peihua, the remaining financial resources of the village and two levels of finance have been reduced by 30% to 50%, making them more dependent on central transfer payments.However, this transfer payment did not exist at that time, and the village government still had to find a way to make up for the funding gap.Administrative institutions at the township level have been further weakened. There were 47,136 townships in China in 1995, but only 34,400 remain today.This is the result of the decentralization of power by the central government, reducing financial allocations to townships, expanding the authority and power of counties, and making counties assume responsibility for medical education (since 2002), and township cadres basically only focus on family planning and agriculture.Many hope that township-level institutions will cease to exist in the near future. The construction of a new socialist countryside has brought quite a lot of good news.After investing 300 billion yuan in 2005, the central government's investment in rural areas and agriculture in 2008 is likely to reach 562 billion yuan.The increase was large in absolute terms, but unchanged as a share of total government spending. From 2005 to 2008, the central government's total expenditure ratio in rural areas was always 9%. Investment in rural infrastructure has grown substantially over the past few years and has now become a major expenditure of village-level governments.According to a survey conducted by the World Bank, in 2004, the per capita infrastructure expenditure of the village was 43 yuan, and the per capita current expenditure was 40 yuan.However, this estimate ignores the transfer payments from the higher-level governments. If included, the per capita infrastructure expenditure of the village rose from 48 yuan in 2000 to 191 yuan in 2004 (and this data does not include villagers’ voluntary labor.) .As Cai Xiaoli points out, infrastructure investment in villages and townships has increased significantly, but it is not properly reflected in official statistics—meaning that the already spectacular scale of fixed asset investment in the whole society may still be significantly underestimated .The higher level government provides more than 50% of the funding.This is an improvement in the quality of life for millions of rural households who have access to clean drinking water, gas, electricity, better roads and clear mobile phone signals. Funding allocated to rural areas has increased, but some issues remain unresolved.First, there are many uses of funds. More than 50% of the transfer payments are "special" funds, which means that the central government requires that the funds must be used for specific purposes.Of course, the purpose of earmarking is to ensure that funds are not misappropriated by local governments.But the disadvantage is that the local government has no flexibility in the use of funds, and cannot be used for the special needs of the local government and local people.In addition, there are also problems such as delay in allocation of special transfers or poor planning, and lack of coordination among different financing departments.Also, there is a lack of independent assessment of the results of project completion.The reports we read at all levels of government are full of information such as how much money is spent, and there are few specific goals achieved and data on the efficiency of fund use.This is a problem because perhaps there is a lot of waste and it seems the pendulum is too fast for the central government to handle.The next stage of improving rural production and living conditions may have to include giving local governments more power and effective regulation of their behavior to ensure that power abuse does not occur. There is also the problem of overstaffed administrative agencies that has not been resolved for a long time. In 2000, there were 40 million civil servants at and below the provincial level. By 2005, this number had increased to 46 million, most of whom were civil servants at county and township levels.Each government department basically has a minimum of four levels of administration: ministry, department, bureau, and division, resulting in a lot of duplication of labor and a heavy burden on taxpayers.Figure 6.6 presents the per capita expenditure of village-level governments.Village cadre salaries account for 21% of the total budget and one-third of the total operating costs.In some areas, the financial burden of grassroots governments is very heavy, and farmers have to raise cadres to raise pigs and cattle.Fu Anheng and Huang Peihua believe that part of the reason for the expansion of county and township government agencies is the unified national civil servant salary structure.The basic salary of civil servants in a county does not vary much.In economically developed areas, the salaries of county and township civil servants can also receive “bonuses” from municipalities or industrial parks; in economically backward areas, the salaries of civil servants are quite good compared with the local average and are very stable.Therefore, civil servant positions are very popular, and officials try every means to insert relatives and friends.The researchers of the World Bank found that in a certain county's current expenditure budget in 2003, 99.5% of the agricultural bureau was wage expenditure, 99.5% of the forestry bureau, and 98.8% of the animal husbandry bureau.Until now, there has been limited evidence that this problem is under control.If the economy is doing well, it's not a big problem, and there's enough money to support a huge bureaucracy; but if the overall economy is doing badly, local revenues are tight, meaning local government budgets are more likely to be used to pay civil servants, Social tensions may surface. It's not just the financial situation in the countryside that worries us.Farmers need funds to buy agricultural materials such as seeds, equipment, and fertilizers.Due to the highly seasonal nature of farming, loans are taken at the beginning of the farming season, but the money to repay the loan is not available until after the autumn harvest.Also, farmers need small loans to expand agricultural inputs.In the last part of this chapter, we look at the current development of microfinance in China.After briefly reviewing important policy trends, we look at what actually happened, and then I lay out where the experts think policy should go. Now we are back in Xinjiang again, reviewing some of the discoveries I made during my research there in 2008.The Rural Credit Cooperatives in Aksu Prefecture have been developing microfinance since 2001. According to a banker I visited, the microfinance of the Rural Credit Cooperatives has been very successful.The deposits of farmers during the planting season cannot meet the huge demand for credit, and the rural credit cooperatives have received financial support from the Bank of China and the Agricultural Development Bank of China.One farmer entrepreneur I interviewed took out a loan to purchase irrigation equipment, and another private processing company also took out a loan.Rural credit cooperatives usually provide loans to rural households between 20,000 and 50,000 yuan per loan, and the loan interest rate does not exceed the central bank's benchmark interest rate in the Aksu area by 40%.They told me that farmers with good credit can get an interest rate of 20% above the benchmark (equivalent to a monthly interest rate of 1% and an annual interest rate of 10%).The local bank executives I met said with confidence that farmers are a very honest group, with a loan repayment rate of 99.8%, which means that the risk of farmers abandoning their loans and running away suddenly is very low.An obvious motivation for repayment is that repaying the loan on time is the only way for farmers to continue to receive loans for the next few years.Even so, I was still amazed at the high repayment rate.It is estimated that about 1.6 million rural households in Aksu participate in microfinance.Aksu is the exception, not the rule.In many parts of China, rural finance is not serving farmers well. In recent years, China's rural microfinance has taken several important steps.At the beginning of the new century, the restructuring of rural credit cooperatives kicked off. In 2005, a small loan company supported by the People's Bank of China was launched. In 2006, the China Banking Regulatory Commission (hereinafter referred to as the CBRC) launched a new rural credit mechanism - village banks.The recent move is that since May 2008, the People's Bank of China and the China Banking Regulatory Commission have jointly promoted the legalization and expansion of small loan companies.At the same time, there are also global institutions active in the field of rural microfinance across the country, such as the United Nations Development Programme, the International Finance Corporation (IFC, under the World Bank Group), PlaNet Finance, Maxim Group (Micro Cred), American Action International (Accion), and government poverty alleviation agencies. Behind these developments, some major policies are playing a driving role.First, the relentless efforts of high-level government to promote rural development.Justin Yifu Lin, chief economist of the World Bank, is one of the brains behind these policies and one of the active promoters of microfinance reform.其次，甚至在很早以前，央行就已深刻认识到20世纪80年代和90年代农村合作基金会制造的混乱，以及商业银行，尤其是农业银行撤离农村导致农民享受的金融服务极其有限所潜在的危险。在前任和现任领导吴晓灵、易纲等人的大力支持下，央行希望能为拓展农村金融服务做些工作。近期中央关注的一个重点是中小企业融资难问题。在始于2008年的此次经济放缓中，中小企业受到很大冲击。预计未来的发展会清楚地表明，农村金融领域、中小企业融资领域会不断地取得新的发展，一些由政府自上而下主导，一些则由草根力量推动。 今天中国农村金融市场的参与主体主要有农村信用合作社、NGO、小额贷款公司、村镇银行以及村民互助资金。下面分别给以介绍。 农村信用合作社堪称农村金融教父，以多种形式经营了数十年。在很多地方，农信社已经具有相当的规模，并且经常是乡镇一级唯一的金融机构。在经济较发达的地区，农信社往往向中小企业贷款；在更为农业化的地区，则主要面向农民发放贷款。全国范围内农信社经营状况参差不齐，有些经营得很好，有些经营不善。与商业银行（村镇银行以及小额贷款公司）相比，农信社的贷款上限受央行的监督（商业银行可在基准利率之上自由浮动）。目前，农信社贷款利率是央行基准利率的2.3倍，这是因为在很多农村地区农信社垄断了贷款。因此，央行担心它们利用这种优势提高利率。 农信社究竟向多少农户发放了贷款仍有争议。官方数据显示，农户覆盖率是33%。据央行数据，截至2008年6月底，农业贷款总计达1.76万亿元，占所有银行贷款的6%，面向农户的贷款约为1.2万亿元。这些数据表明中国整体农村金融形势要好于很多发展中国家。 但是，一些我在2008年有过交流的国内外农村金融专家却认为，这些数据过于夸大实际情况。其中一位专家引用一项调研数据称，很多地区面向农户的贷款比率较低。他认为，农信社出于政治原因夸大了数字。很多“农业”贷款可能实际上贷给了开办企业的富裕农户（他们仍然可以被称为“农户”），或者贷给了商业性农场。另一位专家认为，官方数字中包括了以前的未偿贷款，因此夸大了今天的信贷规模。另一位分析家认为，全国性农村贷款覆盖率没有多大意义。例如，在吉林省，农信社可能向60%～70%的农户提供贷款，而在四川、云南、贵州等地，这一比率不足10%。离乡镇越远的农户，得到农信社贷款的可能性越低。中国农业大学教授何广文于2005年在浙江做的一项调研显示，29%的中小企业获得了银行贷款，一般来自当地农信社（有时候是农行分行）。何教授发现，尽管部分银行/农信社开始以信用为基础发放贷款，但依法成立的公司可用资产作为抵押申请贷款，在中国这是获得贷款的一个关键条件。此外，农信社的放贷还不得不常常受制于行政压力。 面向农户的贷款中，抵押是个难点。近年来，农信社对农户的贷款采取了一些新的担保方式，如农户联保贷款（例如5户农户在自愿基础上相互提供贷款担保），“公司+农户”生产经营模式中，企业为农户提供担保等。在部分地区，第二套住房、拖拉机甚至耕牛也可以作为抵押。但留给农信社（以及其他从事农户信贷的机构）的麻烦在于，一旦贷款难以收回，如何变现抵押物（想象假如你第一时间被派去抓住这些抵押物），这经常是一个难题。如果还不上款的村民一怒之下将牛被牵走、拖拉机被开走的消息诉诸媒体，贷款机构或许会受偏向弱势群体的舆论的谴责，想想假如一个外国慈善机构想收回抵押物，该引起多少怒火。当前时点，对于社会稳定的担忧可能会制约贷款的发放，如果农信社或其他机构没有足够的信心拿回抵押物，那么信贷经理可能决定没必要冒风险。2008年初，部分试点地区允许农民以土地作为抵押申请银行贷款。按照现行制度，农民的土地不归个人所有，而是集体所有。因此从理论上说，如果贷款收不回来，当地农信社应该能够得到土地使用权，并有权将其出售。但实际上，这一行为并没有受到法律保护。其次，即便法律允许，事实上真的可以这么做吗？这个问题十分关键，只有这个问题得到解决，大部分金融机构才敢没有顾虑地为农民提供贷款服务。 过去几年的农信社改制取得了一些积极进展。央行注入数十亿资金填补农信社在20世纪90年代的巨额亏损。2002年，农信社开始对农户信用进行评估，向贷款农户发放农户贷款证（农户小额信用贷款）。2003年以来，在银监会的支持下，农信社向农村商业银行改制。希望此举能集中资金资源、分散风险并改进信用评估。地方政府也希望农村信用架构具有更大规模，以支持当地的项目建设。但令人担心的一点是，农信社改制将使其远离农民，尤其是如果改制后的农信社出于成本考虑关闭位于农村地区的网点。出于这一原因，监管部门中有一种意见是放慢农信社重组速度。 不论土NGO，还是洋NGO，只要不打算吸储，通常无须银监会批准即可搭建台子（基金会等）投入经营。监管部门之所以允许这种做法，是因为不存在储户存款损失的风险。它们的资金来自慈善机构、国际性组织或者政府。 这一类型中最典型的例子是中国扶贫基金会，该机构直属于国务院扶贫开发领导小组办公室，开展小额信贷以及健康保健、教育等项目。小额信贷项目自1996年成立以来，为13万农户发放小额贷款累计达3亿元。2007年，发放贷款38000笔，贷款金额达1.18亿元，平均每笔贷款金额为3100元。总贷款中90%贷给从事农业生产活动的农户，包括农业种植和家畜饲养。该基金会的小额信贷可以说非常成功。 但对很多NGO来说，可持续发展是一个问题。把钱散出去并不是小额信贷可持续性挑战的解决办法。过去几年中，国际慈善似乎已经不再以小额信贷为重点。熟悉商业运作的人士有时会被以慈善为基础的机制抗拒，因为他们希望投资能够持续，甚至希望获得报酬。此外，还有一些NGO所从事的项目，包括国外和国内的慈善机构，往往经营不善并且缺乏透明度。 另一个问题是基层如何看待慈善扶贫。一位供职于官方小额信贷机构的相熟的朋友说：“在北京我们谈扶贫，在下面，从来不提这两个字。如果这样说，那简直干不下去。”它们自视为商业化运作的基金会；否则，贷款是收不回来的。其他从事小额信贷的国际慈善机构面临着同样的问题。这也是银行面临的危险，尤其是开展农村金融业务的外资银行。客户有可能将他们的贷款视为慈善性质的捐赠，你们那么有钱，这点贷款可以不还了。这样一来，贷款机构很快就没法经营下去。我们真正需要的是一种能够持续经营的小额信贷模式，它能够自我维持，一旦找到了这种模式，就可以扩展到全国。 2005年，中国人民银行首批小额贷款公司试点，此年成立了7家小额贷款公司。这些公司发放小额贷款，但不吸收存款，资金来自投资者。2008年，银监会和央行联合发布关于小额贷款公司试点的指导意见，允许非正规融资（如温州地下钱庄）合法经营。5个省份参与首批试点，数家小额贷款公司作为企业法人登记成立。随后，随着试点向全国推广，更多小额贷款公司成立。例如，据何广文教授的统计，截至2008年底，宁夏回族自治区共成立了21家小额贷款公司。据中国国际经济技术交流中心白澄宇估算，2007年初登记的7家小额贷款公司共有资金1.32亿元，经营表现差异较大。这一数字现在看来是低估了。 很多接近决策圈的人士希望，小额贷款公司能够成为民间资本和农民之间的渠道。但是，实际情况是小额贷款公司几乎无一例外地以中小企业为主要服务对象。这是由于中小企业有较强的盈利能力，所以小额贷款公司更愿意贷款给那些现金流稳定、资本收益率良好、行业有增长前景的中小企业。而农户一般满足不了这些条件中的任意一条。央行和银监会2008年发布的指导意见更多地指出了小额贷款公司的发展方向。如果准入条件进一步放开，这一改革会迅速形成规模。这是当前面临的挑战。问题在于，央行不希望90年代农村合作基金会导致的金融秩序混乱那一幕重演。当时，各地数千家合作基金会允诺高息从农民手中吸收了大量存款，然后以稍高的利率贷出。最终导致巨额亏损和资金的滥用，农民存款收不回来，造成农村金融秩序的极大混乱。央行不得不偿还储户存款，农村合作基金会被取缔或转入农信社。基金会的教训十分深刻，并给央行和地方政府带来沉重的经济负担，它们不得不花很大的力气收拾烂摊子。有鉴于此，央行对于过快放宽小额贷款公司准入条件十分谨慎。目前不允许其吸储，至少在经营的第一年，只能使用自有资金。如果某个经营小额贷款公司的资本家亏损了，那么，人们可以说那是他自己的问题。小额贷款公司在健康运营一定期限后（有的是一年），可以从银行业金融机构融资，融资余额不得超过资本净额的50%。我不敢肯定银行是否有兴趣，或有多大兴趣为小额贷款公司放贷。但对于温州等地的金融企业家来说，他们早已在当地央行分支机构和银监会的眼皮子底下，自由地经营并实现了相当的规模，目前的小额贷款公司模式对他们没多大吸引力。很多人仍然乐意游弋在金融灰市里等待政策进一步放开。2008年中，我同部分温州地下钱庄老板有过交流。他们抱怨小额贷款公司不适合他们，因为他们的模式是吸储放贷。也有人认为小额贷款公司规则会进一步放开，最终能够转制为银行，到了那个时候，他们会把主要业务放在上面。据媒体报道，截至2008年底，温州活跃着16家小额贷款公司，其他民间融资机构开始转战全国其他地方，但大部分不够活跃。一位长期从事民间融资的温州老板对我说，如果不进一步放开政策，小额贷款公司的试点将遭遇彻底的失败。 小额贷款公司的试点也为慈善机构获得法律身份提供了一条路径。首家外资小额贷款公司南充美信服务有限责任公司（Micro Cred Nanchong）在四川南充挂牌成立，2007年10月开始投入经营，注册资本为5500万港元。南充美信主要面向当地微型及小型企业提供有担保和无担保小额贷款，贷款规模在5000～75000元之间。截至2007年底，南充美信发放有效贷款169笔，计划在2008年突破1000笔，平均每笔贷款规模为24000元。但南充美信也面临着同样的问题，资金只能来源于慈善，这限制了它在当前成功的基础上再接再厉扩大规模。如果不能吸储，只能依靠资本金，小额贷款公司是无法实现规模的。 央行推动小额贷款公司试点之后，银监会也积极参与到农村金融领域中来，于2005年底启动村镇银行改革。村镇银行注册资本金要求较低，在乡（镇）设立的村镇银行，注册资本不低于100万元；在县（市）设立的村镇银行，注册资本不低于300万元。作为基本上已对中国银行业实现了全面监管、深刻了解农村金融潜在问题的监管机构，银监会认识到它可以提供哪些帮助。因此，银监会只允许已经处于它监管之下的银行设立村镇银行，规定单一境内银行业金融机构持股比率不得低于20%，希望商业银行能够方便地将自身已有体系和有经验的人手移入它们的小型村镇银行。但问题在于，大部分商业银行都不太具有面向农民的小额信贷经验，而且村镇银行实际开展业务时，目光更有可能瞄准中小企业，世界银行的林毅夫认为这种可能性是存在的。在2008年撰写的一篇文章中，林毅夫认为村镇银行的所有权结构会“侵蚀掉为农村的农户放贷的任何动机”。而且，这一规则也会阻止很多小额贷款公司转制为村镇银行，因为它们担心失去对银行的控制权。 村镇银行的一个重要优势在于可以吸收存款，因此从理论上说，每一家村镇银行都可以实现一定的规模（不像小额贷款公司，目前只能依靠自有资金，因此扩张空间有限）。央行或银监会对村镇银行的贷款利率也没有限制。唯一的限制是《民法通则》，明确要求民间借贷的利率最高不得超出银行同类贷款利率的4倍，超出部分的利息法律不予保护。一个很大的劣势在于，目前村镇银行只能在其所在的村或乡镇开展金融服务。鉴于大多数村镇银行在这样一个小规模客户基础上很难盈利的事实，很多人希望这一地域限制能够根据具体情况而有所放宽。赚钱是重要的，忽视这一点的模式是不可持续的。此外，未来在银监会确认村镇银行运行足够好之后，控股比率或许也应该放松，这样有利于私人资本进来。当然，这是长期的目标。 银监会2006年底到2007年所做的另一项工作是创建农村资金互助社，将它置于法律架构之下，使之具备法人资格。在资金互助社模式下，一定数量以上、符合一定条件的农民以自有资金入股，为社员提供存款、贷款、结算业务。当然，在此次获得合法身份之前，这种社员间的私下借贷活动是比较普遍的。当前，大多数省份展开了试点工作，部分规模较大，已经正常运行的资金互助社正式注册为法人。据何广文的调研，大多数资金数额较小，但正在形成一定规模。一家位于吉林省的资金互助社规模已经达到850万元，入股社员人数达数百。其他互助社主要在村际扩大规模。 以下是我们在向很多专家请教后总结出的对农村金融政策下一步骤的三点建议。 第一，培养监管能力。目前，银行业监管机构，尤其是地方及其监管机构，在政策监管小额信贷机构方面的能力和经验都很欠缺。这种局面需要改变，否则会阻碍小额贷款公司转变成可以吸储的金融机构或者扩张。省、市和县一级监管干部需要接受培训，可以借鉴世界范围内一些机构多年来开展小额信贷的经验。关键是要确保社区“拥有”资金（并且不将其看作其他人的慈善资金），确保监管者和小额信贷从业者掌握信贷流程（不同于中国的传统银行业较为依赖贷款抵押的做法，小额信贷必须评估现金流），认识到贷款机构自由确定贷款利率的重要性（外面看来很高的利率或许只是反映了小额信贷的高风险，而且，如果小额信贷是农民获得融资的唯一方式，他们也愿意接受15%甚至20%的利率）。 第二，实行灵活监管。在一个新领域的开始阶段，进行试验（试点）是必要的，以找出哪些因素起作用，哪些不起作用。同时，也要充分借鉴90年代农村小额信贷混乱的经验教训。一个很大的挑战是，在这一领域，没有“放之四海而皆准”的做法。因此，要想农村小额信贷欣欣向荣，就要允许百花齐放，允许有差别。这也意味着地域限制、所有权限制、较高的资本金比率以及不得吸储的规定等，都可以根据具体情况而放宽。监管者（经过足够培训）将乐于见到对各地遇到难题的有针对性、个性化的解决方案，也愿意放手让一些地区的小额信贷机构去尝试哪种模式最有效果。当前存在的问题是，诸多限制制约着实质性进展的取得。很多参与小额信贷领域的慈善机构并不认为过去几年的监管动作事实上取得了很大进展。如果很多拥有在其他国家开展面向农民的小额信贷经验的慈善机构认为进展不够显著，那或许我们的政策确实存在问题。“这不是某个机构的失败，”一位小额信贷专家告诉我，“让各种小额信贷机构在一个监管框架内做它们想做的事，然后让更多小额信贷机构获得成长机会。”增加竞争意味着新的客户必须被发掘出来，他们可能就是很小的企业和更多农户。 第三，允许私人资本进来——要理解贷款机构能够盈利是这一行业可持续发展的唯一方式，尤其是对中小企业贷款。前面提到过，我在温州见到的很多民营企业家在制造业赚得大把资金，希望能有机会进入银行业。但是，我见到的这些人中间没有一个对当前的小额信贷监管环境感到满意。要开设村镇银行，必须找到一个银行做股东，但大多数在中国经营的银行（包括外资银行）不太情愿找合作伙伴。那些开立的村镇银行更希望找到具有中小企业贷款和小额信贷经验的合作者，而不是温州商人。开设小额贷款公司倒不必需要银行，但需要多个股东，且单个股东持股比率不超过20%，这意味着没有人能获得控股权——这是大多数温州商人最看重的目标。而且，小额贷款公司也不能吸储。 由央行起草并于2008年底提交国务院法制办的《放贷人条例》，看来也没有令温州地下钱庄感受到更多兴奋。根据该条例，借贷利率不能超过央行基准利率的4倍。央行这一规定显然是旨在防止形成高利贷。但是，当前地下融资中相当大一部分是短期借贷，本身就是很有风险的，现在的实际市场利率突破了4倍基准利率的上限。而且，该条例禁止放贷人吸收存款，也就是说他们仍要依靠自有资金。在监管者的眼中，这可以阻止穷人的血汗钱被无德放贷人窃取。但这一条例的不利之处在于，那些活跃在金融灰市中的放贷者没有很大的动力从阴影中走向明处。 总之，到目前为止，小额信贷领域的改革已显露出希望的曙光，但在规范地下融资以及为中小企业和农民提供融资帮助方面做得还不够。在2009年即将走过的时候，中国仍在寻求中小企业融资和农村金融领域的艰难突破。