Sustainable Development Under The Perspective Of The Beijing Municipal Government Investment And Financing

China is the world’s largest developing country, although China has achieved great economic success, but the unbalanced, uncoordinated and unsustainable issues are still outstanding in the development, structural contradictions still exist, and the income gap between rich and poor are still widening. In particular, the ossification of the old economic system has become a main problem restricting China’s economic and social progress. Only emphasing efficiency, while ignoring the quality of development is unsustainable. It is time for the economic system to be reformed. Local economic development, as well as social and livelihood construction is to be restricted by the local natural conditions, economic system, cultural system and social system, etc. With multiple difficulties, China’s institutional mechanisms have not yet made the necessary adjustments or are going through an adjustment, adaptation, readjustment. In this key stage of reform, China’s local governments must maintain social stability, that is, keep balance of economic development and livelihood security. Before the macro decisions and policies play a basic and fundamental role, within the framework of existing institutional mechanisms, the social frictions can be reduced by using some microscopic approaches to resolve some practical difficulties and problems through innovative, and this is of great strategic significance for the local economic development and livelihood security.Economic restructuring and transformation of the mode will be the focus of economic work in future. Economic construction should pay more attention to quality instead of too much emphasis on speed, and change the motivation of economic growth from relying on investment to relying on consumption and technological innovation. The local governments should not overly pay attention to the investment in the field of economic construction, but should attach more importance on the public services. As for Beijing Municipal Government, it faces with the contradiction between people’s increasing demand for public goods and services and the government’s limited financial resources. On the other hand, our central government is implementing the prudent monetary policy in the near future, so the funds may be keep a tight trend in the macro level in a considerable period of time. Not just for the finance of Beijing Municipal Government, the supply of funds for the society as a whole may be in absolute tension. In the case of both relative and absolute shortage of funds, it is a serious chanllange for the managers of Beijing to maintain the public products and services, in order to guarantee the people of Beijing to enjoy the fruits of development, and promote the continuous improvement of people’s living standards.This requires that the Beijing government by means of investment and financing, and give full play to the guiding role of the limited financial capital, attracting a wide range of social capital to open up stable sources of funding for infrastructure and other public services in key areas. However, the Beijing government investment and financing itself still has many problems. This paper would like to solve the problem that how to view the Beijing Government investment and financing issues by standing of sustainable development, and how to supply for long-term sustainable development in Beijing by innovative investment and financing mode or optimize the investment and financing needs. This paper addresses both the symptoms and root causes to solve the problem, therefore the key point is not to explore how the overall transformation of the Beijing Municipal Government investment and financing system. It is an attempt to use oriental thinking and traditional Chinese medicine in another way. It is standing on the overall height of the existing institutional mechanisms within the framework based on sustainable development perspective, sparse and activating blood circulation. The combination of financial and fiscal "maintain pressure" approach can solve the Beijing Municipal Government problem in the short to medium term investment and financing in the public domain. At the same time, government investment and financing means can promote local economic and social sustainable development. It is a reference for the government in other provinces and cities.Along the idea of "theory-empirical analysis-policy analysis", based on economic theory and management theory and the background of the development of the times, the article selectively focus on the context of the"12th Five-Year Plan targets to Beijing City achieving sustainable development in local government investment and financing problems. In the literature review section, this paper reviews the theoretical background and practical reasons of local government investment and financing, including property rights powers in the context of fiscal decentralization not match with the local assessment, flawed incentive system and unbalanced of regional development. The Government assumes too much construction functions and analyzes its negative effect on the local government investment and financing. Then from the perspective of institutional economics, the paper discusses the relationship between the theory of the local government investment&financing and sustainable development, and combs the main mode of local government investment and financing. In the empirical part, this paper uses cases and quantitative method to analyze the current situation of funds shortage faced by the Beijing Municipal Government, trying to find a short-term solution of the non-reform from the perspective of sustainable development. From the demand point of view, the Beijing municipal government must maintain pressure to ensure the investment and financing needs of the local areas. From the supply point of view, it must innovate investment and financing model to dig the potential, using limited financial funds and attracting social forces and resources to meet the needs of the local economic and social development, to balance economic development and livelihood security during the change of institutional mechanisms in Beijing, and ultimately to achieve sustainable socio-economic development. The paper also discusses the probable financing sustainability risk Beijing government faced. In the policy analysis section, this paper provides suggestion and reference from financing model optimization, fiscal policy and monetary policy for Beijing government.In this paper, the main conclusions based on theoretical analyses and empirical analyses are as follow:First, the reality background of government investment and financing impulse is the shortage of local government financial resources under the fiscal decentralization system and the institutional mechanisms background is local officials inadequate assessment and incentive mechanisms. The other main reason is excessive usage of state-owned banks of local governments. The above reasons caused the local government investment and financing impulse will bring a lot of risk, including credit risk and moral hazard caused by the local government debt default. The large financing scale may cause the financial risk and macroeconomic risk, as well as local financial credit risk.Second, government investment and financing behavior is an involved multi-agency relationship. The masses of the people entrust to govern the country of central and local government. Central government entrust local government to manage local affairs. Local government entrusted by the people manages local affairs. Local government establishes investment and financing platform to financing because of the shortage of providing public goods. However in the practice, the excessive dependence on investment and financing platform of local government and the sources of funds for financing platform rely on bank loans result in the high cost of financing while the inefficiency usage of funds. Therefore local government requires innovating financing methods. Targeted on analysis the public and profitability characteristics of public goods in each area and using different investment and financing model leading into private capital to provide the community with more efficient of public goods and services, at the same time pay attention to control risk in the process.Third, the mechanism of foreign government investment and financing system is relatively flexible, however, they gradually establish with their historical background and characteristics. The USA is the municipal bond model. Germany is the lease financing model. France is a public utility franchise. Shanghai investment and financing mode is relatively low than the Chongqing market-oriented mode, mainly due to the high cost of infrastructure construction projects of the western region, long recovery cycle, low level of profitability and less participation of private capital. Tianjin mode is between the above two mode, basically to adapt to the Tianjin current socio-economic status and degree of market. On the one hand, relying on government investment and bank loans still dominate investment and financing system in Tianjin. On the other hand, Tianjin uses regional assets to accumulate resources, taking advantage of the trading center is expanding a diversified financing channels. Beijing has already attempted innovation in the financing model, but the proportion of model innovation is still relatively low. It requires further strengthened in the future.Fourth, the main unsustainable development problems of Beijing Municipal Government investment and financing include the following aspects:First, institutional mechanisms have further reforming and innovation. Second, the limited financial capital, compared with the huge social and public needs, can not meet the needs. Third, Beijing social investment funds, according to the analysis original supply, can not fully meet the economic and social development goals during the "12th Five-Year" period. And it is in short supply. Beijing financing channels are relative to a single individual financing channel and over-reliance on bank loans, leading to high financing costs.Fifth, according to the development goals of the Beijing "12th Five-Year" Plan, Beijing should maintain pressure and focuses on major to achieve sustainable development with capital constraint. It should not corrupt big demand perfection. Beijing needs using the perspective of sustainable development to choose the key areas of investment and financing, to ensure key areas of investment and financing sources of funding, to adjust the direction of government investment and financing social development structure. The financing model of the key areas must be sustainable and market-oriented. Playing the enthusiasm to the social capital in the public domain-and improving the protection of investment and financing in key areas of Beijing is necessary.Sixth, the development objectives of Beijing can be considered the sustainable development strategy in the short and medium term. Therefore the selection of focus areas must firmly focus on the development of Beijing "12th Five-Year" Plan and the current situation of post-industrial stage. In the progress of designing investment and financing program in the specific areas, on the one hand, according to the theory of public goods, it must distinguish between the different areas of public property and profitable property to control the different financing risk, cost and design the incentive model respectively. The design of targeted programs can also further consider the less use of funding sources and further tap the potential to mobilize all forces that can be mobilized to Beijing’s economic construction and social development. The ultimate goal is to achieve "two aspects of sustainable’’:Beijing regional socio-economic sustainable development and Beijing investment and financing mode and project funding sustainable development. Seventh, the degree of marketization of the Beijing financing channels is not enough. A lot of private capital put into the public domain construction has a policy threshold obstacle. Therefore Beijing either to improve the government’s investment and financing mode, or play a policy leading role to fully tap the private capital in order to participate in the potential provided by the Beijing Municipal Construction and public goods. In addition, creating a favorable financial environment, sound risk management and monitoring is necessary to prevent the risk of the Beijing Municipal Government financing.