| Since founding ceremony of the People’s Republic of China,especially since the reform and opening up,with the acceleration of economic growth and urbanization in China,the construction of public infrastructure has made rapid progress,supporting the economic and social development of our country more and more obvious.Due to the limited financial resources of local governments,the provision of public goods including public infrastructure is far from enough,and it is imperative to reform the investment and financing system.The main purpose of the reform of the local government investment and financing system is to change the local government as the only investment subject of the public infrastructure,and to mobilize social capital into the supply of the public infrastructure,at the same time,it plays the role of saving financial funds,developing private economy and improving the service efficiency of public goods.The theme of this paper is to analyze the effectiveness and shortcomings of the current local investment and financing reform model,and explore a high-level balance between the effectiveness and risk of local investment and financing model.The logical starting point of this paper is the local investment and financing platform which has been popular in the past few years.Although these platforms have their subjective and objective reasons,but also to the financial operation of great risk,although the subsequent local investment and financing model overall progress,but there is no fundamental improvement in risk management.At the beginning of reform and opening up,China broke the centralized management mode of central government in the period of planned economy,and local governments began to have greater autonomy.The Third Plenary Session of the 16th Central Committee for the first time proposed to allow non-public capital into the laws and regulations are not prohibited in the infrastructure,public utilities and other industries and fields,public infrastructure investment and financing main gradually diversified.Since the 1990s,especially since the reform of the tax distribution system in 1994,the local govemments’disposable financial resources have been sharply reduced.However,with the rapid development of Economy and society,the task of public infrastructure construction has become more arduous,and the need for construction funds is very urgent,local Government Investment and financing system reform is imperative,as its main way to achieve the local investment and financing platform came into being.In order to deal with the international financial crisis in 2008,China has put forward the active fiscal policy with expanding investment as its main content,which provides the necessary conditions for local investment and financing platforms to become bigger and stronger.The reform of local investment and financing system,which is characterized by local financing platform,is essentially operated by local government and based on government credit.The reform of the local investment and financing system with the local government investment and financing platform as its main content has the effect of accelerating the construction of public infrastructure,improving the operating environment of Economic Society and stabilizing economic growth,but its negative effect is that the local government debt burden is increasing day by day,the local government and even the entire national debt risk highlights."The beginning of its work is also Jane,its will also be huge.".After 2010,with the gradual slowing down of China’s economic growth,the local government’s financial pressure and government debt become more and more serious,the scale of fiscal investment boundary constraints become more obvious,the local government investment and financing platform norms,constraints is imperative.The main idea of further reform of the local government investment and financing system is to give more prominence to the market mechanism and attract more social capital to participate in the construction of public infrastructure.PPP,government investment funds,government purchase services and other innovative investment and financing models developed rapidly.However,through empirical analysis,this paper holds that the above-mentioned innovation of Investment and financing models has not fundamentally solved the problem of the balance between the provision of public infrastructure and the safety of financial operation,and has even further widened the gap between fiscal revenue and expenditure in actual operation,increased the risk of government debt.From the perspective of foreign experience,in recent years,European and American countries have emerged a wave of privatization of public goods and public services.Social capital,especially private capital,has participated in the construction and operation of public facilities,and has achieved good results.After the Second World War,the Japanese government actively absorbed domestic funds through national administrative means and concentrated its national efforts on infrastructure and strategic industrial construction,which played a huge role in promoting the revitalization of the domestic economy.Western countries have also accumulated considerable experience in crisis management and debt management.In recent years,China’s economy has entered a period of new normal development.The growth rate of China’s economy has shifted from high to medium to high,and the fiscal policy boundary has become more and more restrictive in the investment and financing of local governments.While preventing and defusing the risk of debt,we will improve the relevant legal system and strengthen the role of social capital in public goods and public services.This paper expounds the necessity for local governments to implement the reform of the investment and financing system,change the supply mode of public products,and introduce private investment.This paper analyzes the main features and typical cases of new financing methods such as local governments ’autonomous issuance of debt,PPP model,government investment funds,and government purchase of services,and puts forward the problems and suggestions for advancing the reform of the investment and financing system.Against the backdrop of a slowdown in macroeconomic growth,local governments are facing increasing fiscal policy constraints in their investment and financing activities.We need to follow the objective laws of economic development more closely,and pay particular attention to the cumulative effect of blind expansion of investment and financing on government debt risk.We will shift away from simply expanding debt and concentrating on infrastructure development,pay more attention to doing what we can and do our best to ensure basic public services and public goods.We will not blindly build ahead of the curve,but we will also take care to prevent the risks accumulated before.In particular,we will transform fiscal direct investment into financial support to foster diversified investment entities and promote sustainable fiscal operations.This study consists of eight chapters.Chapter 1 Introduction.This paper mainly introduces the background of the research,the current theoretical and practical status of the research problem,the significance of the research,the research methods,the content of the research and the main innovative ideas,etc..The second chapter is the theoretical basis.Firstly,the paper summarizes the research viewpoints of the economics scholars on government investment and financing according to the chronological order,and then analyzes the basic concepts such as the connotation of the government investment and financing system.Chapter Ⅲ analysis of the boundary constraints of fiscal policy.This part analyzes the boundary constraints of fiscal policy through the analysis of the Keynesian total demand management policy and the transformation of the IS-LM model,and points out that relying solely on the limitations of fiscal policy is the "investment trap." After fiscal policy is in the ineffective range of policy boundaries,there is no way to increase government investment by increasing deficits.It will only increase the debt burden and even induce systemic risks.On the basis of this theoretical analysis,this part also verifies the substitution effect of private investment to government investment,and points out that in the future,in the face of financial policy constraints,it is necessary to further play the role of private investment and encourage private capital to participate in the supply of public products.The analysis of this chapter laid the theoretical foundation for the analysis of private capital entering the field of infrastructure in the following chapters.Chapter Ⅳ of China’s investment and financing system reform of the main process.After the founding of the People’s Republic of China,China’s investment and financing reform process and the development of local financing platform companies,financing platform companies in recent years,the important form of China’s investment and financing reform.Research the development track and future development direction from financing platform companies in Shanghai,Tianjin and Chongqing.Chapter Ⅴ Innovation of Investment and Financing System Reform.It mainly analyzes the characteristics of several new types of investment and financing models such as self-issuance of government debt,government investment funds,government purchase of public services,and PPP that the state has encouraged and promoted since 2014,when the government has strengthened government debt management and restricted the arbitrary expansion of financing platforms.The sixth chapter focuses on the PPP model analysis.It mainly analyzes the meaning,operation principle,development situation,existing problems and suggestions of countermeasures of PPP model,and empirically analyzes the impact of PPP projects and PPP investment amounts on local fiscal revenue and expenditure gaps in recent years.Chapter Ⅶ Risk Analysis of Investment and Financing by Local Governments.According to the current macroeconomic situation,we focus on analyzing the risk of government investment and financing behavior increasing the leverage of government debt accumulation,and use KMV model to analyze the debt risk of each province and city.Chapter Ⅷ Policy Outlook.The paper reviews the history of the entry of private capital into the public goods field in Western developed countries and its results,as well as the international experience that China can draw on.Put forward policy suggestions for the next step to resolve debt risk,and make prospects for the direction of government investment and financing.From the point of view of the above research content,this paper hopes to integrate theory and practice,knowledge and operation,experience and lessons,problems and countermeasures,norms and evidence,emphasis and comprehensiveness,self-anatomy and"stone of other mountains".The aim of this paper is to provide evidence for the reform of government investment and financing system and the prevention and resolution of macro risks.The innovation of this paper lies in the analysis of the boundary of fiscal policy.In the past,under the framework of Keynesian analysis,it was often premised on the assumption that the government could borrow debt indefinitely and expand government investment,without considering the boundary issues of fiscal policy.But trees can not grow to the sky,and fiscal spending and government debt are also limited.Based on the previous research results,this article amended the IS-LM model under the Keynesian framework,clearly poin ted out the boundary of fiscal policy,the government’s investment capacity can not be expanded indefinitely,otherwise there will be excessive debt burden and financial operational risks.When the fiscal policy is in the state of boundary,the substitution effect of private investment to government investment should be brought into play,and the convergent fiscal policy of tax reduction and fee reduction should lead to private investment.Second,it points out the substitution effect of private investment on government investment.In the past studies on the relationship between government investment and private investment,it is generally from the perspective of government investment that attention is paid to whether there is a "crowding effect" on private investment after the growth of government investment.However,after analyzing historical data,this study found that the overall trend since China’s reform and opening up is that the proportion of government investment has declined,and the proportion of private investment has increased(although the growth rate has declined in recent years),which can be understood as a gradual replacement for government investment.Therefore,it is the substitution effect of private investment to government investment.This is different from the previous study that focuses on whether government investment will squeeze out the perspective of private investment.In the early stage of the market-oriented reform,this substitution effect dominated the main process of government investment and financing.The third is the empirical analysis of the effect of local government investment and financing practice in recent years.Through a comprehensive analysis of the relationship between the number of PPP projects,the amount of investment and the fiscal gap between provinces and cities in 2015-2018,it is concluded that the PPP model does not reduce fiscal pressure.On the contrary,excessive PPP projects may also increase fiscal revenue. |
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