China has achieved phenomenal progress in the reform of its rural credit cooperatives over the past two years, Li Wei, vice chairman of China Banking Regulatory Commission (CBRC) said in Beijing Monday.

"It's a marvelous achievement for the rural credit cooperatives to shake off the losses of more than 300 billion yuan (US$36.28 billion) in 2003 to realize a capital adequacy ratio of 2.49 percent," Li was quoted as saying by Monday's China Securities Journal.

CBRC statistics revealed that by March, the capital adequacy ratio of China's rural credit cooperatives grew 10.94 percentage points since the end of 2002.

The first eight provinces to start reforming rural credit cooperatives have found their capital adequacy ratios had risen as high as 8.65 percent at the end of last year.

With an aggregated deposit balance of 3.064 trillion yuan (about US$370.5 billion) as of June, China's rural credit cooperatives have become the fourth group of financial institutions to break through the deposit record of 3 trillion yuan. The other three are the Industrial and Commercial Bank of China, the Agricultural Bank of China and the China Construction Bank.

Li said that the cooperation between rural commercial banks and rural credit cooperatives has demonstrated dynamism. Currently, there are 43 rural financial institutions in China, including nine commercial banks and 34 credit cooperatives.

With another 13 under construction, China is expected to have 150 to 200 rural financial institutions by the end of next year, he said.

(Xinhua News Agency July 18, 2005)