1. Background and main content The CPC Central Committee's No.l document required to adapt to the reality, the characteristics of rural society and the needs of the farmers, and to continuously deepen rural financial reform:
1) Integrated financial and taxation, monetary and credit related as well as financial supervision measures to drive financial resources to continuously support agriculture, farmer and rural area related issues, and to ensure rural credit amount keep increasing, and agricultural loan ratio do not decrease. Improved the system of agricultural loan statistics and enhanced the structure of agricultural loans. Continued and improved taxation policies that are supportive to rural financial development, and established pilot programs for credit asset pledged relending, and provided better, lower relending interest to support agriculture.
2) Encouraged various commercial banks to innovate financial services that help with issues related to agriculture, farmers and rural areas. Agriculture banks financial department reform pilot programs were spread to all county-level sub-branches. Agriculture Development Bank of China, while strengthening the functional position of policies, need to provide more loans for rural and agricultural infrastructural constructions, such as irrigation and water conservatory projects and road construction in poor areas, and cautiously develop proprietary businesses. China Development Bank should innovate new financing models to help with issues related to agriculture, farmers and rural areas, and further increase medium to long-term loans granted to agricultural and rural constructions. Improved the capital, the strength and management capability of rural credit cooperatives, and established themselves firmly at the county-level, and served agriculture, farmers and rural areas. Encouraged the Postal Savings Bank of China to expand their rural financial services. Increased the coverage of rural banks in rural areas. Actively explored new forms of effective measures for rural cooperative finance development, and prudentially started pilot programs for farmers' cooperatives' internal mutual aid fund, and implemented local governments' supervision responsibility.
3) Innovated rural financial products and services. Successfully implemented the pilot program of mortgage and loans on pledge of the contracted land rights and housing property. Encouraged financial guarantee services for agriculture, farmers and rural areas related projects, and intensively developed government-supported financial guarantee institutions and re-guarantee institutions, and improved the lender-bank cooperative financial guarantee system. Supported bank industry and financial institutions to sell bond specialized in supporting agriculture, farmers and rural areas, and encouraged agricultural companies that met certain conditions to sell the bond. Started large agricultural machinery financing and leasing pilot programs. Enhanced rural inclusive finance. Continued to increase fiscal interest subsidized small-sum guarantee loans，support for rural women.
2. Implementation of policy and evaluation Until the end of 2015, banks' and financial institutions' balance of loans for agricultural purposes increased by 11.7 percent, and reached 26.4 trillion yuan. The balance of loans for agricultural purposes accounted for 28.1 percent of the balance of all loans, and the newly added loans for agricultural purposes accounted for 32.9 percent of all new loans.
1) Rural financial support was enhanced. The first was about monetary credit policy. Firstly, the policy of differentiating required deposit reserve ratio. In 2015, People's Bank of China adjusted the required deposit reserve ratio 5 times, including four times of across-the-board deposit reserve ratio cut and one time targeted deposit reserve ratio cut, and cut across-the-board deposit reserve ratio by 2.5 percentages point in total, and cut targeted deposit reserve ratio by 0.5 to 6.5 percentages point in total. In key areas that supports agriculture, farmers and rural areas and small and micro-sized enterprises, the targeted deposit reserve ratio cut for commercial banks whose cumulatively cuts have achieved prudent operation, and whose loans for agricultures, farmers and rural areas or small or micro-sized enterprises was between 0.5 to 1 percentage point. The accumulative targeted deposit reserve ratio cut for rural financial institutions (rural cooperative banks, rural credit cooperatives and rural banks) was between 2 to 2.5 percentages point. The accumulative targeted deposit reserve ratio cut for Agriculture Development Bank of China was 6.5percentages point for its support for major irrigation and water conservation projects and infrastructure construction. Secondly, carried out agricultural refinancing and rediscount policies for rural financial institutions. At the end of 2015, the refinancing balance of loans for agricultural was 196.2 billion yuan, and the refinancing balance of loans for small and micro-sized enterprises was 75.2 billion yuan, and the rediscount balance was 130.5 billion yuan.
The second was about fiscal tax policy. First, the rewarding policy for county-level financial institutions' agricultural loans remained consistent. In 2015 rural financial institutions awarded 2.357 billion yuan. Second, the central budget subsidized 2.929 billion yuan, with a 0.31 billion yuan increase compared to that of 2014. Third, continued to implement rural preferable tax policies. Exempted financial institutions' business tax for the interest from small agricultural loans, and when calculating income tax, only 90 percent of the income was counted. For insurance companies that provide insurance services for plant and animal farming, 90 percent of the income was counted when calculating their taxable income. For county-level financial institutions that provide financial insurance services, their tax rate was lowered by 3 percent when it came to their income from agricultural financial insurances. At the same time, raised the upper limit for agricultural small loans from 50 000 yuan to 100 000 yuan. Fourthly, increased agricultural insurance subsidies. Currently central budget provided agricultural insurance subsidies for 15 categories including corn, rice, wheat, cotton, potato, oil plant, sugar plant, reproductive sow, dairy cow, fattening pig, natural rubber, forestry, highland barley, Tibetan sheep, and yak and so on. For plant farming insurance, the central budget subsidized 40 percent for the mid-western areas, and 35 percent for eastern areas. Xinjiang Production and Construction Corps, the reclamation areas directly under the Central Government, SinoGrain, China National Agricultural Development Group Company Limited (hereinafter referred to as central entities) received 65 percent of the subsidy, and provincial budget subsidized at least 25 percent. The central budget subsidized 50 percent in the mid-west for insurance on reproductive sow, dairy cow and fattening pig, it also subsidized 40 percent in the eastern areas; the central entities received 80 percent of the subsidy, and local finance subsidized at least 30 percent. For public welfare forest insurance, the central budget subsidized 50 percent. Greater Khingan Mountains Forest Group was subsidized by 90 percent, and local governments subsidized at least 40 percent. For commercial forest insurance, the central budget subsidized 30 percent, and Greater Khingan Mountains Forest Group was subsidized by 55 percent. Local finance and budget subsidized at least 25 percent. Central budget's agricultural insurance subsidy provided national coverage, and the local government could also roll out related insurances.
2) Rural financial reform was constantly deepened. First was the policy-level reform on financial institutions made steady progress. According to the general plans on implementing the reform approved by the State Council in December 2014, Agriculture Development Bank of China further determined and explicated the areas of business between different banks, improved the implementation structure, and revised the article of association. Second was the breakthrough of major commercial banks' reform. The department of agriculture, farmers and rural areas of the Agricultural Bank of China further improved corporate governance, deepened the internal reform, strengthened external supervision and regulation, enhanced the bank's competency, and fostered its capability of serving real economy. Postal Savings Bank of China successfully attracted investors both inside and outside of China, such as China Life Insurance Company, China Telecom, Swiss Bank Cooperation and Morgan Stanley; the equity diversification process was going well. Thirdly, the rural credit cooperative reform gained significant achievements. The capability of sustainable development was enhanced, the rural financial service was improved, and the reform of property rights system was progressing steadily. In 2015, rural credit cooperatives nationwide profited 223.3 billion yuan. Until the end of 2015, non-performing loans accounted for 4.3 percent of the total loans, capital adequacy ratio was 11.6 percent, the balance of loans for agricultural purposes and the balance of loans for farmers was 7.8 trillion yuan and 3.7 trillion yuan, respectively, which increased by 9.8 percent and 8.8 percent when compared to that of 2014. Some 1 299 county-level unified legal person rural credit cooperatives, 859 county-level rural commercial banks and 71 county-level rural cooperative banks were built nationwide. Fourth, the coverage of rural banks further expanded. As of the end of June in 2015, some 1 270 rural banks had been built nationwide, and in mid-western China alone, there were 769 rural banks, which covered 60 percent of the counties in China. Fifth, the pilot program for farmers' cooperatives' internal mutual aid fund made smooth progress. Provinces such as Shandong, Jiangsu, Sichuan and Shanxi issued the pilot program implementation plan and management regulations, and related counties and cities' pilot programs for farmers5 cooperatives' mutual aid fund were solidly implemented.
3) New progress was made in rural financial products and services innovation. First, the rural credit guarantee policy system was improving steadily. Since related ministries published the Guiding Opinions on Financial Support for the Construction of Rural Credit Guarantee System, Hunan, Henan provinces and some other regions have already published related implementation plans, and have been actively planning on constructing provincial-level credit guarantee policy system. Secondly, the pilot program for mortgage financing of management rights of rural contracted land achieved notable progress. Most of the provinces in China have already published related pilot program implementation plans. Prominent achievements were seen in rural areas where the pilot programs for mortgage financing of management rights of rural contracted land were conducted. Thirdly, the credit guarantee award and subsidy policy was working effectively. In Beijing, Jilin, Zhejiang, Hubei and Chongqing provinces (municipalities), cooperatives' credit guarantee rate subsidy pilot programs have been working effectively, and positive outcomes have been seen. For example in Chongqing, as of Nov. 14，2015, the pilot program has reviewed and replied guarantee approval to more than 90 cooperatives, and have provided 101.35 million yuan of credit guarantee loans for 73 farmers' cooperatives, and subsidized 2.2 million yuan for credit guarantee.
4) The agricultural insurance industry developed quickly. In 2015, the revenue for agricultural insurance industry was 37.47 billion yuan; more than 0.23 billion farmers were insured, and about 2 trillion yuan worth of risk prevention was provided. Agricultural insurance clauses were comprehensively upgraded. The insurance companies' responsibility was expanded, the security level and compensation standards were improved, the insurance rate was decreased and the claim settlement procedure was simplified. The pilot program for agro-product price insurance was expanded to 26 provinces, and the insured agricultural products were increased to 18 types. Farmer house insurance covered all the provinces and cities in China, and 93.58 million houses were insured, and about 1.4 trillion yuan worth of risk prevention was provided. The Chinese agriculture insurance and reinsurance community bearing capacity was increased to 240 billion yuan, and could satisfy more than 96 percent of the reinsurance demands.
5) Agricultural related direct financing made steady improvement. As of the end of October in 2015，a total of 11 agricultural companies realized IPO and refinancing. 49 corporate bonds were issued and financed 24.782 billion yuan in total. In the first three quarters of 2015, some 21 types of agricultural products were traded in agricultural futures market. The agricultural futures transaction volume and inventory volume accounted for 31.4 percent and 44.2 percent of that of total futures, respectively.
