China''s rural finance has great potential to influence China’s economic development in rural areas. For Chinese public authorities, rural financial sector has everything to do with the stability of the countries’ economic development, which reinforces the importance of rural finance. Large capital outflows resulted in the shrinkage of rural finance, rural credit problems and other serious issues. In light of all these issues, the inherent difficulties lie in the underdeveloped institutional infrastructure and low credibility of the debts. One key question should never be overlooked, which is: where does the money come from? Credit helps to improve rural asset accumulation, which in turn became the new basis for provision of more debts. With the instructions of public authorities, guiding new rural financial institutions to enter the market and making use of new financing instruments ─ Agricultural fund as a new financial system, would be a viable solution to solve the dilemma of insufficient funding that haunted Chinese farmers for long.
With the participation of non-government organizations in the agricultural development fund, information symmetry in the governance of funds could be better promoted. Infrastructure, once established, advocates a mode of operation. The agricultural policy-oriented platform for integration of financial resources can lead to the rural credit development and can equalize the public services for farmers. Agricultural funds improve the efficiency of investments through improving the governance of public institutions and broadening sources of investments. At the same time, it diversifies resources for rural credits and loans. Public financial support for rural credit is an enabling policy that attracts more private capital investment from the society as a whole. In this way, a more stabilized rural credit system is established to serve the need of varies objects under diversified cultures in different areas. In addition, Agricultural Bank of China, as the bridge between public authorities and the debtors, should take this precious opportunity to improve its fund management, to lead various institutions, and to make good use of new funds and information. If government funds invested in rural areas could attract more foreign capital, agricultural subsidies could be reduced and the efficiency of public funds would be improved accordingly.
Agricultural information system in Mainland China is still underdeveloped. To develop modern agricultural system, it is essential to utilize the innovated financial tools and systems, so that investments for the agricultural funds could be diversified. In the mean time, public authorities should set its role as the maker of policy, law and regulation in order to provide checks and balances in the system. It is the operation of the agricultural funds that creates the diversification of fund usage, the settlement of return mechanism, the actualization of informative expectations and the legalization of institutional participation. Relaxed loan conditions also provide financial support for the establishment of modern agricultural system, shading light on the dilemma of rural credit loans.