China, Europe and the Netherlands: Opportunity Is Knocking at Our Doors

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business into something of a much bigger value to the 
global society. The foundation today tries to spread 
happiness by running projects in many different fields 
such as health programs, social programs, education 
initiatives and environmental conservation.
Overall however, a crucial basis for a happier world 
is the knowledge about the mechanisms of happiness 
and the results of happiness research. Everyone should 
have the chance to experience at least how 
mindful-
ness, compassion and gratitude
 contribute to a good 
life. This calls for purposeful impulses that can already 
be set at an early stage in school education. Education 
systems must allow the integration of happiness into 
school curricula and promote it in a pupil’s life. By its 
happiness and not only by its grades should we judge 
children when they come back home from school.
Christian Schmidkonz 
Professor, Munich Business School
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China is a major agricultural nation, and since an-
tiquity, issues relating to its “3F Issues” – farming, 
farmsteads, and farmers – have played a crucial role 
in the nation’s social and economic development. His-
torically, no satisfactory solution has been found to 
the “3F” problem, and this has had an impact not only 
on economic development, but also on social stability, 
and even the nation’s very survival. The importance 
of the “3F” issue has only been further confirmed over 
the past 30 years of reform and opening-up. Be it the 
introduction of the household contract responsibility 
system at the end of the 1970s, the emergence of town-
ship enterprises in the 1980s, the explosion of new 
countryside initiatives at the end of the 1990s or even 
the latest wave of new urbanization brought about with 
the 18th Party Congress, the “3Fs” have been not only 
closely involved in each step of the reform and open-
ing-up process, but also provide continuous impetus 
for further reform and opening-up initiatives. China’s 
economic development marks a historic miracle in the 
development of the global economy – today, the coun-
try has become the world’s second largest economy, 
and China’s “3F” policy has certainly contributed to 
this breathtaking development.
China’s rural economy has made considerable pro-
gress since the start of reform and opening-up. Output 
of major crops has recorded steady growth, rural in-
comes have increased rapidly and countryside living 
standards have improved on a continuous basis. By 
2014, China had recorded a miraculous eleven consec-
utive increases in annual output. Despite this, however, 
the economic and social development of rural areas still 
lags somewhat behind in comparison to their urban 
counterparts, and there has been no basic change in the 
By Li Yang
Evaluating 
Rural Financial 
Reform
The recent round of rural financial reform has undoubtedly been 
successful, with fundamental change noticeable in both the financial 
strength and operating conditions of the rural credit cooperative 
system. Furthermore, reforms including market listing and the 
establishment of the Financial Department of "Farming, Farmsteads 
and Farmers" within the Agricultural Bank of China have greatly 
increased its ability to support agriculture.  All of these reforms 
have enabled greatly increased diversification in the rural financial 
institutions system and improved financial supply.
Development
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inexorable accumulation of high-quality social resourc-
es in China’s metropolitan areas. The imbalance in the 
development of urban and rural areas has led to visible 
differences, and has become one of the major issues 
slowing China’s economic and social development.
Finance is the life blood which drives the economy, 
and economic development, but furthermore, the “3F” 
issues cannot be resolved without effective support 
from today’s financial industry. A well-run rural finan-
cial system not only provides effective financial support 
and payment and settlement services for rural econom-
ic and social development, but also helps players in 
the rural economy to avoid and weather risk. In recent 
years, China’s financial industry has grown rapidly, and 
its contribution to social and economic development 
is everywhere to be seen. Against this background, 
further reform and improvements to the rural financial 
system that more effectively applies the rural financial 
system to rural social and economic development are  
key requirements to resolving the “3F” issues.
As part of the overall reform and opening-up pro-
cess, reforms to China’s rural financial system have in 
recent years achieved remarkable successes. The latest 
round of rural financial reform kicked off in 2003, with 
the 
Circular Regarding Pilot Programs for Deepening 
Rural Credit Cooperatives Reform
 promulgated by 
the State Council in June of that year. The aim of this 
round was to reform the rural credit cooperatives, and 
revolved around two core issues. Firstly, using the 
work unit as the legal entity to reform the property 
rights systems of rural credit cooperatives, clarify the 
relationships between property rights, improve the cor-
porate governance system and differentiate different 
circumstances; all in order to define different forms of 
property rights. Secondly, reforming the rural credit 
cooperative management system by handing manage-
ment of rural credit cooperatives over to local govern-
ments. Under these guiding principles for reform, large 
numbers of regional rural credit cooperatives have 
been restructured into rural commercial or rural coop-
erative banks, and there has been a clear improvement 
in the corporate governance standard of rural financial 
institutions.
In addition to rural credit cooperatives, further high-
lights of this round of rural financial reform include 
the emergence of new rural financial institutions such 
as village and township banks, loan companies and fi-
nancial unions; all encouraged and promoted by  Some 
Opinions on Adjusting and Relaxing the Access Policies 
for Banking Financial Institutions in Rural Areas and 
Better Supporting the Construction of New Socialist 
Countryside 
issued by the China Banking Regulatory 
Commission in December 2006, which adjusts and 
relaxes access policies for banking financial institutions 
in rural areas. The emergence of these new institutions 
effectively fills a gap in financial services in certain un-
derdeveloped areas, and provides powerful support to 
the economic and social development of rural areas.
When evaluated in overall terms, this round of re-
form has undoubtedly been successful, with fundamen-
tal change noticeable in both the financial strength and 
operating conditions of rural credit cooperatives. As of 
the end of 2014, there were a total of 665 rural com-
mercial banks, 89 rural cooperative banks and 1596 
rural credit cooperatives, with total assets of 11.5189 
trillion, 957 billion and 8.8355 trillion RMB respec-
tively—marking a respective increase of 123, 7.8 and 
2 times compared to the start of the reform initiative. 
The net profits after tax were 138.1 billion, 12.6 billion 
and 82.7 billion RMB respectively, a marked improve-
ment in profitability. In addition, reforms including 
market listing and the establishment of a “3F” Finan-
Li Yang
Vice-President and Academician, Chinese 
Academy of Social Sciences
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