The Evolution of Agricultural Credit during China's Republican Era, 1912–1949

Hong Fu, Calum G. Turvey

• Publisher: Palgrave Macmillan
• Year: 2018
• Print ISBN: 9783319768007
• eBook ISBN: 9783319768014
• Topic: Economics
• Subtopic: Agribusiness
• Index: Economics

In the modern era, China's rural credit landscape is transforming at a dizzying rate, but, in terms of financial development, these changes represent a second attempt in the past 100 years to reform China's credit institutions and provide credit access to farmers. The first period was during the Republican era, between 1912 and 1949, which saw the first attempts at formalizing rural credit with the Industrial and Agricultural Banks. This book uses primary data and papers to present a full picture of the difficult conditions China faced during the Republican era in order to explain the myriad reforms to the country's rural credit system. Fu and Turvey build a narrative around these developments based on the foundation of thousands of years of dynastic rule in order to explore the specific impacts of drought, floods, famine, communist insurgencies, Japanese expansionism, and more on credit access, supply and demand. They consider powerful personalities—such as J.B. Taylor, John Lossing Buck, Paul Hsu and Timothy Richards—and influential institutions—from Nanking and Nankai Universities to the China International Famine Relief Commission—that sought ways to end the cycle that trapped the vast majority of Chinese farmers in poverty. This rich, wide-ranging, and stimulating work will appeal both to readers focused on present day China and those who want to understand China's rural economy and credit policies in a historical context.

© The Author(s) 2018

Hong Fu and Calum G. TurveyThe Evolution of Agricultural Credit during China’s Republican Era, 1912–1949https://doi.org/10.1007/978-3-319-76801-4_1

Begin Abstract

1. Current Conditions of Rural Credit in China

Hong Fu¹ and Calum G. Turvey²

(1)

Shandong University of Finance and Economics, Jinan, Shandong, China

(2)

Cornell University, Ithaca, NY, USA

End Abstract

1.1 Introduction

This book tells the story of major developments in the provision of agricultural credit in China with a particular emphasis on the Republican era between 1912 and 1949. We are motivated by the rapid expansion of agricultural credit and institutions in the post-1978 modern era to provide some semblance of understanding about agricultural credit in China more generally, and economic history provides a perspective for any student or practitioner in the agricultural finance space. This is particularly true since the reforms around 2003 that allowed the conversion of Rural Credit Cooperatives (RCCs ) to Rural Credit Banks and Rural Cooperative Banks (RCBs) which may well see the era of the RCC soon coming to an end. The developments in RCCs in the modern era are usually attributed to reforms in the mid-1950s, but as our story tells, there was a thriving and growing industry of RCCs well before Chinese liberation. 1949 changed everything but the essential structure that was developed prior to liberation remained—that is, the heart of agricultural lending was to be based on cooperative principles, or at least some semblance of cooperative principles that was operational in the post-liberation economy.¹ The main difference, as far as we can tell given the historical record, is that between 1949 and 1950 rural credit societies remained intact in many locations in China but only in skeletal form. Rural credit societies promoted by the Kuomintang (KMT) disappeared at liberation, either dissolved or bankrupt as the Chinese national currency collapsed. But a few lingered on, reconstituting themselves by 1950 as pilots for the establishment of rural credit cooperation and Credit Unions and expanding thereafter.² The Communist Party of China (CPC) had experience in developing rural cooperation. During the early 1930s the communists formed credit societies in their soviets, and to a significant degree this provided encouragement to the KMT to follow suit under rura...

Table of contents

• Cover
• Front Matter
• 1. Current Conditions of Rural Credit in China
• 2. China’s Sorrow
• 3. Low-Level Equilibrium and Fractional Poverty Traps
• 4. Traditional Forms of Credit in Rural China
• 5. Emergence of Modern Rural Financial Institutions in the Warlord Era: 1912–28
• 6. Estimating the Demand for Farm Credit in the Republican Era
• 7. The China International Famine Relief Commission
• 8. Rural Reconstruction
• 9. A Blueprint for Credit Under Rural Reconstruction
• 10. Evolution of the Cooperative Financial System: 1927–49
• 11. Chinese Communists, Border Currency, and Agricultural Credit during Wartime
• 12. The Farmers Bank of China
• 13. Nong Ben Ju, the Farm Credit Bureau, and the KMT’s Agrarian Policy
• 14. Successes and Failures of Agricultural Cooperatives and Credit Societies
• Back Matter