Game Analysis on Benefits Relationship in the Strategic Innovation Process of Rural Credit Cooperatives

Abstract

The strategic cooperation of rural credit cooperatives (RCCs) involves different stakeholders, including government, RCC and various strategic partners. In this paper, a framework of game analysis for them was constructed and conclusions were as follows. If option mastery was under control of government, the result of strategic cooperation would be that governor was likely to reduce the supporting subsidies to RCC, in the meanwhile, profit levels increased. Otherwise, if under control of RCC and managers had more Keywords-Rual Credit Cooperatives; starategic cooperation;partner;benefits relationship; game analysis; I. INTRODUCTION Chinese central government has issued its first policy document for 2015, which advocate to adopt a proactive approach in satisfying actualities of rural areas, characteristics of agriculture and needs of farmers. It also advocates to continuously deepen financial reform and innovation in rural areas, promote capital strength and governance level of rural credit cooperatives (RCCs), solve three rural issues based on country area, as well as enhance inclusive finance in rural areas. Due to the imbalance of economic development in different rural areas, rural finance features the diversification and personalization of needs. Under this circumstance, currently RCCs face both opportunities and challenges, including changes in basis and conditions, service objects as well as needs for the development of rural finance under new normal economy, changes in policies involving reform of mixed ownership, interest rate liberalization and deposit insurance system, changes in demands of the whole-industrial-chain financial services and comprehensive financial business innovation, as well as changes in market competition from Internet finance and private banks, all of which push changes in the needs of rural finance. Up to now, qualification share of RCCs nationwide has decreased to 1%, achieving the aim of RCC reform put forward by China Banking Regulatory Commission (CBRC), which strives to cancel qualification share of RCCs before 2015 and encourage qualified RCCs