The purpose of this paper is to investigate the relationship between business risk and credit use in rural China. Specifically, we aim to see if there is risk balancing behavior among Chinese farmers when they make financing decisions under risk constraints. We also identify other significant factors influencing farmers’ decision to borrow from financial institutions. Discrete choice experiment (DCE) is used in our study to reveal the cognitive process of farmer’s economic decisions. A total of 336 respondents from Shaanxi, Shandong, and Zhejiang provinces were surveyed in October 2019 and analyzed using conditional and mixed logit models. We find strong evidence in support of the risk balancing hypothesis that farmers tend to reduce financial risk by decreasing debt use when business risk increases. Farmers are willing to pay 2.932% and 1.564% more on interest rate when business risk decreases one level and profitability increases one level respectively.