The Research Of Local Government Debt Of China

This paper studies the issues of Chinese local government debt. In theory, under the guidance of fiscal decentralization, most countries have the problem of local government debt, in some countries and regions, and even the local government debt crisis. Which is more representative is the European sovereign debt crisis, America’s huge debt problems and Japan’s debt problems. In1994, Chinese fiscal policy implemented tax reform under the guidance of the theory of fiscal decentralization. In China, after the reform of local government debt issues also began to rapidly expand. Especially after the financial crisis in2008, in order to ensure the rapid economic growth,the government implement the proactive fiscal policy. Local government revenue expenditure in the case of gaps, in order to support the central funds, local governments can only borrow to get funding for economic development.In order to analysis and discuss the local government debt issues in-depth, firstly we analysis the Chinese local government debt in the background and the international and domestic basic situation of local government debt. The party’s "eighteen" well-off society goals and promote urbanization requires a lot of money, and the source of funds to rely on short-term debt, which forced the scale of local government debt in the short term rapid expansion. Secondly, China’s local government debt was reviewed, Chinese local government debt research literature in2008after rapid growth. Research related to the definition of local government debt, causes, impacts, risks and resolve prevention and other aspects, but systematic study of local government debt issues less literature, one side of which are from the study. This paper analyzes from the perspective of the system of local government debt issues. Study of local government debt, you must first theory. And local government debt related theoretical studies have incentive theory, institutional change theory, theory of fiscal decentralization and public goods theory, these theories can explain to some extent the local government debt causes, effects, risks, and resolve. Chinese local government debt once again conducted an overview of the current situation. Although China’s local government is also under the guidance of the theory of fiscal decentralization of fiscal reform, but the Chinese special economic, political and cultural environment makes China’s local government debt exhibits and other developed countries and emerging countries different characteristics. Fourthtly, in order to understand the China’s local government debt situation, the analysis of the Chinese local government debt is the main causes of the economic and social impacts. In particular, the Chinese localized debt risks have emerged, some of the city investment company appears unable to pay principal and interest situations. In order to better resolve and prevent emergence of local government debt risk, borrowing from the success of local government debt management experience is feasible. The United States, Japan, Australia, Colombia and other countries have the successful prevention and governace in the local government debt. These countries in dealing with local government debt, respectively, have their own characteristics. U.S. municipal bonds hard constraints to govern the implementation of local government debt, forcing local governments to issue bonds must consider their ability to repay and can not rely on the central government to carry out bill. U.S. local government bonds fully market-oriented, market-determined size of local government debt, the cost. In the management of local government debt of the United States also has its own characteristics, the establishment of a dedicated debt management committee. Germany and Japan, local government debt management experience more distinctive common debt issuance, and Columbia’s local government debt risk early warning mechanisms traffic light on China’s local government debt risk management is also a very useful reference and revelatory.In the above study, based on the Chinese local government debt for the current situation, resolve and prevent propose measures for local government debt. For different reasons for the formation of local government debt expansion, proposed a targeted resolve and preventive measures. It Also made China to implement the local government debt risk early warning mechanism. Establishing appropriate early warning indicators, the organization set up a special warning, the debt crisis nipped in the bud is the fundamental role of early warning mechanism. I believe that fiscal decentralization is the Chinese local government debt to form the basic conditions; macroeconomic policies, cadre evaluation mechanisms and SBC is China’s main reason for the formation of local government debt; issueing the local government bonds to resolve the Chinese local government debt is the fundamental way; to update local government debt data is imperative to prevent the debt crisis.