The Agricultural Bank of China (ABC), the only non-listed bank among China's "big four" state-owned commercial banks, is currently under the glare of the reform spotlight. This follows on the heals of Premier Wen Jiabao's announcement during his government work report in March, that a shareholding system will be introduced in the bank and its role in serving agriculture, farmers and rural areas will remain unchanged.

Concerns are hovering over ABC's specific reform plans, the time and the place of its public listing. What is clear, however, is that as its name suggests, the bank's core purpose is to serve the country's agriculture, farmers and rural areas, three components that are vital to the country's development.

The key to a successful reform of ABC is to successfully balance the commercialized operation and better services for agriculture, farmers and rural areas.

When examined, agriculture's fundamental role in China's economic growth needs to be consolidated, as its agricultural industry still remains the weakest link in the national economy. It contributed a mere 11.72 percent to the country's gross domestic product in 2007.

In addition, the rural population now accounts for around 55 percent of the country's total, but their per-capital annual income is only 30 percent of urban dwellers. Last year, per-capita net income of farmers was 4140 yuan ($550), while that of urban residents was 13,786 yuan ($1840).

Infrastructure, education, health care and social security in rural areas all need to be improved. And with the needed development of agriculture and rural areas, increasing farmers' income, and the nationwide campaign of building a new socialist countryside comes the increasing demand for financial services.

However, the number of financial institutions in rural China has been decreasing in recent years, mostly because commercial banks have shifted their business focus to the much more profitable urban markets.

An exodus of the "big four" state-owned commercial banks from rural areas began in 1999, with 31,000 outlets being cut as of 2003. This tendency continues among the other three banks after they completed their reform and got listed.

Statistics from the China Banking Regulatory Commission show that as of the end of 2006, the number of county-level and rural banking outlets was 111,302, accounting for 57 percent of the country's total. But people in 3,302 towns or townships had no access to banks, and two counties and 8,213 towns or townships only had one bank. Compounding the situation was the fact that banking institutions' loaning services only reached 37 percent of farmer households.

Therefore, being the only commercial bank having a specialized operation and management system of rural credit, ABC's onus is to provide the needed services to rural China.

Having an extra bow in its quiver, ABC will incorporate its rural business into the joint stock company to get listed. This is in addition to the similar reform steps it will follow of the other three banks, i.e. financial restructuring, joint stock reform, introduction of strategic investors and listing at the appropriate time.

Accelerating its market-oriented reform while playing a strong role in helping the under-developed agricultural sector, ABC's road of development is obviously more rough than others. In the same time, more opportunities are expected for the special bank nevertheless, which may be a bonanza currently unknown.