Rebirth: I am in Jin-Cha-Ji

It even reminded me of the way large European companies operate. Wei Hongjun also supported Deng Zhihui's idea. These large European and American companies have a wealth of valuable experience in this area. Chinese government departments under the new administration often operate like businesses. So there are commonalities here.

Currently, relations between China and European countries are improving rapidly.

Following French Senator Edmond Michelet's visit to China the previous year, French MP Edgar Faure also planned to visit China in 1955. The attitudes of Britain and France spurred the entire European community to strengthen their diplomatic ties with China. Many smaller European countries began strengthening their diplomatic ties with China.

Although Western Europe had not yet established diplomatic ties with China, most had begun to reach agreements with China and exchanged representative offices. British and French trade delegations frequently visited China, and they also invited Chinese delegations to visit Britain and France.

Therefore, the Central Committee has decided that Liao Chengzhi will lead the delegation to Western European countries.

Wei Hongjun continued, "Have Comrade Lai Ruoyu discuss this with the Ministry of Commerce, and then convene a national conference. Bring together the cadres responsible for this work from all provinces to address the problem of insufficient agricultural and sideline products in large cities."

"it is good."

The two returned to the office together.

Wei Hongjun pulled out a report and said, "This is the budget the Policy Research Office prepared based on our plan for rural cooperatives to develop the agricultural product processing industry."

Agricultural product processing.

This is actually a solution when there is no other way.

From an industrial development perspective, large-scale production undoubtedly reduces costs and improves efficiency. However, China's current transportation situation is very poor. Although railways and highways have developed rapidly in the years since the founding of the People's Republic of China, they are still far from sufficient for a country as large as China.

Look at history, China is known as a major infrastructure country.

Despite the massive infrastructure construction that continued into the 21st century, China's logistics landscape has gradually changed. Only a few Chinese cities rely on railroads, making significant progress in logistics. Transportation in other counties is poor, let alone in rural areas. Not only are transportation conditions in China poor, but transportation options are even more scarce. Given China's current economic scale, a nationwide fleet of trucks would require millions or even tens of millions to meet economic needs. However, the actual number of trucks in the country currently stands at less than one million. Annual truck production and imports simply cannot meet domestic demand.

Therefore, the cost of long-distance transportation is too high and the losses during transportation are too great.

Therefore, the best approach is to process agricultural products locally, minimizing transportation losses and costs. This is also the reason why various rural brigade factories and township enterprises have flourished throughout history. Local processing and sales are a suitable approach for China's current situation. However, establishing these agricultural product processing enterprises in rural areas requires substantial capital investment.

The country definitely has no money.

Then the rural areas need to find a solution themselves.

"The money issue still falls on the credit union."

Deng Zhihui finished reading the budget report from the Policy Research Office of the Ministry of Rural Affairs and thought for a while before speaking. Wei Hongjun said, "You're right. To solve the rural funding problem, we still have to rely on credit unions. Only by pooling rural funds and distributing them through credit unions can we achieve this."

The two of them thought of the same thing.

The government can't provide much funding to rural areas in the short term. Even during the Second Five-Year Plan, when some resources were allocated to rural areas, it was still far from enough to meet the needs of rural industrial development. Currently, the only place rural areas can access funding is through credit unions.

What do rural credit cooperatives do?

That is, rural funds are pooled and then loaned to rural financial institutions. Rural cooperatives developing agricultural product processing plants means that rural areas are developing their own industries.

However, industry is always the sector with the most investment.

While not as high as the heavy industries currently being invested in by the state, it's also not affordable for the average rural population. Therefore, the only option is to use financial means to support rural cooperatives in developing industry. Rural credit cooperatives are a key priority.

"Mr. Deng, but there is a problem."

Wei Hongjun said with a serious expression, "When credit cooperatives were first established, they were very effective. However, after years of development, some problems began to emerge. Ownership issues were complex, credit cooperative funds were scattered, and supervision of credit cooperatives was also chaotic. There was no comprehensive plan for credit cooperatives. How to get credit cooperatives to help the rural agricultural product processing industry is not an easy task. We need to develop a specific and appropriate plan."

"Ah."

Deng Zhihui has been working in rural areas for many years and understands the problems of credit unions.

It's no problem when the scale is small.

However, as credit unions grow in size, various problems arise more frequently. The biggest issue, of course, is that the current government's position on credit unions is somewhat similar to that of rural cooperatives. Credit unions are a type of collective enterprise.

However, there are no complete management and supervision regulations, which has led to many problems for credit unions.

Of course, credit unions, as financial institutions, were not under the jurisdiction of Wei Hongjun and Deng Zhihui. However, rural development was inseparable from rural cooperatives, so the two had to consider the issue of credit unions.

"Mr. Deng, my idea is that the two of us go to the local area for two to three months to conduct research. We should actually see the current development of credit cooperatives in various places, as well as the current cooperation between rural credit cooperatives and rural areas. With first-hand information, we can formulate policies in this area. What do you think?"

"it is good."

Chapter 953 Credit Union Issues

After Wei Hongjun and Deng Zhihui made the decision, they made some arrangements for the work of the Rural Work Department.

Tan Zhenlin, the second deputy minister of the Ministry of Agriculture, is responsible for agricultural reclamation work.

Currently, the Xinjiang Agricultural Reclamation Corps, the Suiyuan Agricultural and Animal Husbandry Corps, and the South China Reclamation Bureau are on track, and future work will simply involve further expansion. However, agricultural reclamation work in areas such as the Great Northern Wilderness, Yunnan, and the Kachin Special Region (Yerenshan Jiangxinpo) is progressing.

There's a lot to deal with.

One was to coordinate the disbanding of the army and its reorganization into agricultural reclamation troops, another was to establish various agricultural reclamation systems, and the third was to organize the agricultural reclamation troops, etc. In 1955, the army was to disband one million troops, and the Ministry of Agricultural Reclamation was to take in .

But it is not an easy task to accept and reorganize so many troops.

Third Vice Minister Li Shaocheng is responsible for agricultural production, specifically the tens of millions of mu (approximately 1955 million hectares) of cultivated land for high-quality seed cultivation this year. The total area of ​​cultivated land for improved varieties of rice, wheat, and corn nationwide, totaling nearly 200 million mu (approximately 1955 million hectares), will be nearly 350 million hectares (approximately million hectares). If this year's promotion of improved varieties goes smoothly, grain production in could increase by at least billion jin (approximately million hectares). Further increases could be expected if water conservancy projects, the improvement of fertile farmland, and the use of both organic fertilizers and chemical fertilizers are considered. Wei Hongjun and Deng Zhihui estimate that the output should increase by at least billion jin (approximately million hectares) in . While rural work is complex, grain production remains paramount.

Fourth Vice Minister Lai Ruoyu is responsible for the free market for agricultural and sideline products. This year, more than ten provinces will be adding free markets for agricultural and sideline products. Careful monitoring is essential to prevent any chaos. Lai Ruoyu is familiar with this work.

Lai Ruoyu was also the cadre directly responsible for the promotion of the free market for agricultural and sideline products last year.

Zhao Dezun, the Fifth Deputy Minister, and Zhang Linchi, the Secretary-General of the Rural Work Department, were responsible for handling the department's daily operations. One was responsible for handling the department's internal affairs, while the other was responsible for processing reports from various regions. Furthermore, they were responsible for maintaining close contact with Wei Hongjun and Deng Zhihui.

After making arrangements, Wei Hongjun, Deng Zhihui, and Luo Weilin left Beijing for an inspection tour. Their mission was to further develop rural agricultural product processing and rural industry and commerce. This was the grand strategy for rural development formulated by the Rural Work Department and had already received the support of the Chairman.

"Last year, the national grain revenue, calculated in RMB, was 32.6 billion yuan, an increase of 1953 million yuan compared to 1.2. Meanwhile, the national rural industrial and commercial tax revenue was 24.8 billion yuan, a full 1953 million yuan increase compared to 6.7. Based on the current development of rural industry and commerce in my country, including the rapid development of the free market for agricultural and sideline products, it's a foregone conclusion that rural industrial and commercial tax revenue will exceed grain revenue by the time of the Second Five-Year Plan. By then, the largest source of national income in rural areas will be industrial and commercial revenue."

On the way, Luo Weilin gave Wei Hongjun and Deng Zhihui a detailed introduction to the rural tax collection situation in 1954. Although rural China was still very poor, it had been liberated for seven or eight years after all.

There has been some accumulation over the years.

Some smart and capable rural areas have developed their own industries and commerce. The state also collects taxes from these rural industries and commerce.

"Rural industrial and commercial income has increased rapidly."

Deng Zhihui nodded.

The rate of accumulation in industry and commerce has always far outpaced agriculture. China's rural grain revenue has seen very limited growth since the founding of the People's Republic of China. This is due in part to limited increases in grain production and the central government's consistent reduction of the proportion of grain allocated to the government. At the founding of the People's Republic of China, grain accounted for 15% of total grain output. Now, in many areas, this proportion is less than 10%. Consequently, grain revenue has remained relatively stable in recent years, fluctuating around 30 billion yuan. The primary source of grain currently released to the market by the state is not grain allocated to the government, but rather grain purchased and marketed under the unified government.

But consider the growth of rural industrial and commercial income. While rural industry and commerce haven't yet fully developed, rural tax revenue from industry and commerce has already exceeded 20 billion yuan. Historically, after the s, with the development of rural agricultural product processing, rural industrial and commercial tax revenue has grown rapidly in rural China.

At this time and space, the rural industrial and commercial income base is better.

This was particularly true in Guangdong and Northeast China. These two regions, one relying on Hong Kong for import and export trade, and the other on the Soviet Union, led to numerous industrial and commercial enterprises within their rural cooperatives. While the national tax rate on these rural cooperatives was low, China's vast rural areas and numerous rural cooperatives meant a large number of industrial and commercial enterprises. These small amounts accumulated to generate substantial tax revenue.

Of course, the rural industrial and commercial income we're talking about now includes not only industrial and commercial enterprises, but also income from agricultural and sideline products, including pigs. Currently, the number of pigs slaughtered each year in rural China is staggering.

In addition, after the free market for agricultural and sideline products was liberalized, these agricultural and sideline products businesses also fell under the category of rural industry and commerce.

These will generate tax revenue for the country.

Wei Hongjun had no idea that rural industrial and commercial income would increase so much in 1954, by nearly 7 million yuan. For New China, where the national income was currently less than 500 billion yuan, an increase of nearly 7 million yuan was definitely not a small amount.

So Wei Hongjun said, "For rural development, besides agriculture, sideline industries must also develop. Relying solely on agriculture, rural areas will never become prosperous. Comrade Wei Lin, what proportion of my country's current rural grain revenue, industrial and commercial income, and other additional income account for in the total rural output value?"

"The state's grain revenue, industrial and commercial revenue, 2.2 million yuan in bonds and other revenues from rural areas, and 3.6 million yuan in agricultural tax surcharges collected by local governments outside of their budgets, all add up to percent of the nation's current rural output value."

"That's less than 10 percent." "Yes."

When the People's Republic of China was first established, rural grain revenue alone accounted for over 5% of rural output. With adjustments and the development of the rural economy over the past few years, the proportion of grain revenue, along with industrial and commercial income, and other income sources, has fallen to %. Grain revenue now accounts for only about % of rural output.

"Old Wei, if the countryside is to develop significantly, industry and commerce must also develop, so the agricultural product processing industry must develop."

"Ah."

Wei Hongjun nodded.

After hearing these data, Wei Hongjun and Deng Zhihui became even more convinced that rural areas must develop industry and commerce in addition to agriculture, and that agricultural product processing must flourish. Subsequently, Wei Hongjun, Deng Zhihui, and Luo Weilin each led their teams to conduct research in various provinces on the issue of rural agricultural product processing. Their goal this time was to secure funding for rural industrial and commercial development and ensure that funds flowed into rural areas.

In addition to researching rural conditions, the three individuals conducted detailed investigations of credit cooperatives across the country. Currently, rural credit cooperatives are located in towns and villages. So, while the three individuals are not directly in charge of rural credit cooperatives, they do have the authority to investigate their development.

After nearly fifty days of research each, the three met in Wuhan to exchange research information with each other.

After reviewing their respective research materials, Wei Hongjun asked, "Comrade Weilin, what do you think?"

Wei Hongjun, Deng Zhihui, and Luo Weilin conducted research in over 20 counties across seven provinces, and everyone's expressions were grim. The situation was more dire than they had imagined. Finding funding from rural credit cooperatives was not easy.

"Vice Premier Wei, Vice Premier Deng, judging by recent developments, rural cooperative credit cooperatives are still very important. Since New China vigorously developed rural credit cooperatives, usury in rural towns and villages has completely disappeared. Those who previously lent usurious loans in rural areas lowered their monthly interest rates from 10% to 5%, and finally to 1%. They eventually discovered that depositing money in the bank was more profitable than lending money, so the rampant usury in rural areas was completely eradicated."

After the development of rural credit cooperatives, the immediate effect was the elimination of rural usury.

Because credit unions offer low interest rates.

Usury could no longer survive. Furthermore, during the "Three Antis Movement," cities also cracked down on these private loan sharks. Consequently, those loan sharks who had been lending money in rural areas had no choice but to deposit their money in banks.

"But the current rural credit cooperatives also have many problems." "Tell me about them."

Both Wei Hongjun and Deng Zhihui highly value Luo Weilin.

Luo Weilin was a perceptive person, observing problems closely. He was always able to propose solutions to any problem. Consequently, he served as director of the Policy Research Office of the Rural Work Committee and then the Ministry of Rural Work. Over the years, he provided numerous policy recommendations to Wei Hongjun and Deng Zhihui.

Wei Hongjun and Deng Zhihui are ready to recommend Luo Weilin as deputy minister of the Ministry of Rural Affairs.

Wei Hongjun and Deng Zhihui had their own opinions on this investigation. But they still wanted to hear the opinion of Luo Weilin, a cadre. Luo Weilin said: "The biggest problem with rural credit cooperatives at present is their positioning, or rather, the state has no clear positioning for rural credit cooperatives. From the perspective of the credit cooperative's positioning, it is a mass cooperative financial institution and a part of the rural cooperative economy. However, precisely because of this, rural credit cooperatives are neither government agencies nor government financial institutions. Because the state has not clearly defined rural credit cooperatives, there are even fewer clear regulations for management. Who will manage and supervise rural credit cooperatives? Although rural credit cooperatives are currently under the leadership of the People's Bank of China, they are only leaders, not banks under the People's Bank of China. Precisely because of this ambiguity, rural credit cooperatives appear to have a high degree of freedom, but in fact they are restricted in many aspects. This ambiguous positioning has brought about problems in several aspects."

Everyone is aware of the problems with rural credit cooperatives, but they are currently minor and not a big concern.

Because rural credit cooperatives primarily pool funds from farmers and operate primarily in rural areas, they currently have fragmented organizations and funds, lack a unified structure, and lack influence. Currently, they lack even a single county-level organization.

There are different credit cooperatives in different towns and villages.

Therefore, the government has neglected rural credit cooperatives, and their status is similar to that of rural production cooperatives. If Wei Hongjun and Deng Zhihui had not wanted funds for the development of rural industry and commerce, they would not have conducted research on rural credit cooperatives.

Historically, not to mention the rural credit cooperatives of the 1950s and 1960s, even in the 1980s and 1990s, the situation of rural credit cooperatives remained chaotic. In other words, the problems surrounding rural cooperative credit cooperatives have never been properly resolved. Whether it's ownership or management rights, there is a lot of confusion.

But now Wei Hongjun must integrate rural credit cooperatives.

Because the rural development strategy formulated by the Ministry of Rural Affairs requires the support of credit cooperatives.

"First, there's the issue of credit cooperative staff. Early credit cooperatives were spontaneously formed by farmers, simply to pool funds and support each other. Therefore, when they were first established, they were managed by the farmers themselves. This wasn't a problem for a few or a dozen households, due to their small size and limited capital. They could collaborate with mutual aid groups to develop the rural economy. Their primary function was to provide low-interest loans to farmers in need. However, with the development of my country's rural cooperative economy, the scale of credit cooperatives has steadily expanded. From a few or a dozen households, they have grown to dozens, hundreds, and even thousands of credit cooperatives, formed by the union of several rural production cooperatives. These credit cooperatives have become the prototypes of small banks, or even rural small banks. However, due to the complex history of cooperatives, many staff members, including credit cooperative cadres, lack formal financial knowledge. They have no idea how a small bank with so much capital operates, resulting in significant management lags. The accounts of some credit cooperatives we've surveyed recently were extremely disorganized, and the primary problem lies in management."

Luo Weilin quickly reported his research findings to Wei Hongjun and Deng Zhihui. Just like developing rural cooperatives.

A major challenge for credit cooperatives is talent. Initially, they were small, capital-scarce institutions, dedicated to mutual aid. At best, they would lend small sums to farmers in times of drought or flood. However, as their scale and capital expanded, they became financial institutions.

Financial institutions are professional institutions.

More professional talent is needed than in rural production cooperatives.

But where can we find so many specialized professionals? Furthermore, rural credit cooperatives were founded by farmers, and the majority of their capital comes from farmers. In other words, these farmers are the shareholders of the credit cooperatives. During the rectification of rural credit cooperatives in the 1980s and 1990s, these shares were largely liquidated. But now, the majority of shareholders in China's rural credit cooperatives are farmers.

This means that rural credit cooperatives have to listen to these shareholders, and many of their managers are farmers. This has led to a very chaotic management structure in credit cooperatives due to historical reasons.

The accounts are also messy.

Many managers of rural credit cooperatives lack this knowledge. The more rural credit cooperatives develop, the more chaotic their internal management becomes.

"As long as the ownership issue of credit cooperatives, that is, the share issue, is not resolved, and the positioning of credit cooperatives is not resolved, then the staffing issue of credit cooperatives cannot be resolved. Because who can solve the staffing arrangements of credit cooperatives?"