Study On China Local Government's Loans

Raising local government's debts is still a comparatively new topic in China.Besides, there hasn't been a successful example of it all over the world for it's on animproving process. Local government's debt is an important part of the national debtsystem, and raising debts is a reasonable right of governments under the formal fiscaldecentralization system, which is the experience coming from the long practices ofnearly all the fiscal decentralization countries. However, it's a paradox from ourcountry's local finance practice, which essentially is a result of the ambiguous divisionof fiscal power and responsibility between central and local governments. Although ourcountry's budget law specifies that local government don't have the right of issuingloans, we can't deny the necessities of it. Therefore, specifying our country localgovernment's right of raising loans and setting up the local government loans system arenot only an important part of improving our country's fiscal management system, butalso an important move of formalizing local government's finance practice andincreasing central government's control power by innovating the local government'sloan system and turning the recessive loans into formal loans under the effective systemof monitoring and controlling.This thesis is divided into five parts:The first part mainly concludes the present research of this field and puts forwardthis thesis's research meanings, research method, innovations etc.And the second part applies the public goods theory, the public finance theory andinstitutional economics theory, plus China local government's practices as the researchfoundation of our country local government's raising debts.The third part analyzes our country local government debts' present situations andalso problems. The fourth part learns the experience of foreign countries' local government debtsand concludes their common things.The fifth part tries to set up a system of our country's local debts. It researchesmainly about two parts: the design of local government's debts (debt types, scale,interest rate, etc.) and its control and monitor.