Research On The Debt Problem Of Townships In China

At present, the government liability in the township level is a heavy problem in the Suzhou City as well as in the other areas of China. It even has a greater increase rate than that of the public financial income in many towns. Up to several times of annual public income, the government liability is characterized by complex structure, poor clarity, and a large part is becoming hidden debt.There are a lot of factors contributed to the form of the huge government liability. The national policy change reduces the public income of the town governments, but increases their rigid expends. Overstaffing and inefficient supervise over expenditure are the administration reasons for it. The other reasons include the paralyzed political system in the township governments, incomplete tax policy and transfer disbursement system in China.In attempt to solve the debt problem and minimize the financial risk in the township governments, this thesis analyzed the debt problem, employed the theories of economics, administration and finance, and put forward solutions for the prevention and elimination of the debt problem in the short term as well as in the long term. In this thesis, the author suggested that the town governments should develop their regional economy, reform the financial and administrative system, adjust their functions, standardize the transfer disbursement system. make a comprehensive financial budget, and broaden the investment ranges in order to increase the income and cut the expense of the government. In this way, we can build a debt management system to solve the debt problem and minimize the financial risk in the town governments effectively.