Inclusive finance and inclusive rural transformation in China

This chapter provides an overview of inclusive finance as it relates to China’s agricultural economy. Financial services in China have changed considerably over the past 100 years, however it was not until the late 1990s and early 2000s that China’s government began to focus on agricultural finance issues. The chapter reviews developments related to financial inclusion and how China has levered change in financial institutions to expand in breadth and depth the financial services facing China’s farmers. It provides an empirical evaluation of how well financial inclusion has performed in terms of agricultural credit markets. However, Chinese farmers have mixed demand for financial services (e.g. microcredit) and in some regions traditional reliance on informal borrowing prevails, while in other regions, particularly those with a high rate of poverty, a new system of aligned credit relationships have evolved.