The shift of focus from the countryside to the cities also manifested itself in capital diversions. In commercial banks and rural credit associations, RMB 4 trillion of deposits were from rural areas, but loans to farmers amounted to only RMB 1 trillion, creating a flow of funds from the countryside to the cities.

    By the end of 2006, the Chinese government had begun to intensify its efforts to develop rural financial institutions, and it has systematically encouraged the establishment of rural banks, loan companies and rural fund cooperatives. "This is an optimistic signal to rural financial markets," says Du.

    Since China implemented its direct grain subsidy policy in 2003, a subsidy of RMB 50 for each mu (1/15 of a hectare) of grain crop has been paid out to farmers through bank cards. Nevertheless, to take Huangtuozi Village as an example, the nearest bank is two kilometers away, while the nearest ATM is 10 kilometers away.

    According to Song Deshun, villagers used to save their surplus money in banks or rural credit associations, but the situation has changed somewhat in recent years, with many farmers gradually beginning to invest in the stock market and mutual funds. "The business scope of rural banks should also be broadened, such as securities and insurance," says Du.

    According to Guo Cuixia, an employee at the Miyun Branch of the Beijing Rural Commercial Bank, since late 2006, due in large measure to a favorable funds market, clients from rural areas have increased, with some traveling regularly from remote villages. "Currently, no bank has set up a financial management center, even in economically developed villages and towns," says Du. "And the financial products farmers need are still in short supply." But with China's overall prosperity growing steadily, he says, it is only a matter of time before the countryside, too, has a sophisticated banking and credit system to meet the demands of farmers for access to capital.