Research On The Debt Risk Of Chinese Local Government Financing Platform

Local government financing platform (LGFP) in China has a long history. To promote the development of the urban infrastructure and public utilities raise money, the LGFP has played a positive role. In November 2008, in response to the international financial crisis, the Chinese government implemented a proactive fiscal policy, and the LGFP has sprung up. LGFP as an important mode of financing in local government has played a positive role for the promotion of urban infrastructure construction and the development of public utilities to raise funds. But there has also been problem that the size of the platform debt growing too fast, not up to standard operation, the surge debt risks and so on. To effectively prevent fiscal and financial risks, to maintain the sustained and healthy economic development and social stability, the research and governance of debt risk of LGFP must be strengthened.The goal of this study aims to establish the index system and evaluation model assessing debts'running state of LGFP by survey and compilation of relevant data, to use statistical methods to make objective, empirical assessment of the current LGFP hidden debt ris. Empirical results as a starting point to complete the task of warning the debt of LGFP, and profoundly analyze the causes of the debt risk of LGFP from a multidimensional perspective, wealthy LGFP targeted debt risk path from the point of view to establish and perfect the mechanisms. The Selection of local government risk management of investment and financing platform for the study of the content is of great practical significance. Not only for government introducing provisions and measures as soon as possible in order to effectively prevent and solve the problems and risks of LGFP, but also for risk measurement and control of the LGFP itself has certain reference significance.On its debt and the debt risk situation has made the basic evaluation, studies have shown that LGFP debt growth too fast, lending to the rest of the space is little, debt surge are rapidly eating into its limited effect, if this trend is not effectively, will soon be pushed risk in accumulation of all aspects of the extent of the crisis. From the perspective of LGFP for the financing channels of the financing structure and financing characteristics but also not conducive to the control of debt risks and defuse.The innovation of the study is mainly reflected in the following two aspects. First, take full advantage of financial markets open data, starting from the point of view of LGFP financing channels to deep study the structure and risk characteristics of LGFP debt, which more scientific, more real and accurately reflect the reality of the situation and development trend of the debt risk of LGFP than the past simple estimate of the size of the debt. Second, to take full advantage of the public documents of the bond market, empirical researched LGFP operating characteristics, investment projects, the relationship with the local government, debt service funding sources and other important content closely related to the debt risk.