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The Oxford Companion to the Economics of China$
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Shenggen Fan, Ravi Kanbur, Shang-Jin Wei, and Xiaobo Zhang

Print publication date: 2014

Print ISBN-13: 9780199678204

Published to Oxford Scholarship Online: December 2014

DOI: 10.1093/acprof:oso/9780199678204.001.0001

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Rural credit in China

Rural credit in China

(p.320) 51 Rural credit in China
The Oxford Companion to the Economics of China

Calum G. Turvey

Oxford University Press

This chapter examines rural credit in China, based on surveys conducted in the western and central provinces of Gansu, Shaanxi, and Henan between 2007 and 2010. It discusses the credit conditions of farm households, the role of credit policy, and rural credit reforms. It concludes that while an artificial ceiling on agricultural loans is often viewed as an implicit subsidy for farmers, care must be taken with this interpretation. The surveys show that the ceiling of 15.088 per cent is not binding in the sense that at that rate of interest the demand for credit is virtually zero.

Keywords:   credit demand, credit policy, credit reforms, subsidies, agricultural loans

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