A Study On The Problems And Countermeasures Of Local Government Financing In The Construction Of Urban Infrastructure In China

For a long time, the investment and financing main body of China’s urban infrastructure construction are all local governments at all levels. The quickening pace of urbanization construction, deepening, local government financial revenue and expenditure gap is more and more big, Spending more than income, interfere with the city infrastructure construction. At the same time, in order to cooperate with the country’s economic policy of promote domestic demand and the steady rowth, to response the 4 trillion economic stimulus plan,the local government must form a complete set of large capital projects. Therefore, the local governments at all levels began to form all kinds of platform companys, and through bank loans, issuing bonds and equity trust way to raise money, to ensure the advancement of the region’s infrastructure construction, promote regional economic development. A series of incentive and swelling pressure lead to local government debt funds expended, and the potential debt risk, financing behavior of local government, the problems existing in the financing process and follow-up supervision are also gradually exposed. It is an important theoretical and practical problem that how to make the financing mechanism of local government to sustainable, efficient compliance, scientific and reasonable, how to provide a stable, full specified amount, the compliance of construction fund for the urban infrastructure construction.This paper intended to on the foundation of the theoretical basis of urban infrastructure construction、financing of local government and the public finances, reviewing the development of China’s local government financing, introducing its current situation and main financing way, sums up the emphasis of this paper discuss:local government financing in urban infrastructure construction of our country existing problems and root cause. The problems mainly expounds that the following three questions:the local government function dislocation, performance evaluation mechanism is not sound; Financing is not standard, the lack of long-term mechanism and the imperfect financing system. Based on the research of the existing problems, analyze the root cause of the above problem:First, China’s political system reform lags behind economic reform; Second, constrained by the current financial system, only through debt financing to construction; Third, urban infrastructure construction has been a lack of investment, in order to improve the existing situation need to invest a lot of money; The last, the concept of "rule of man" is better than the concept of the rule of law, lack of rigid constraints.It is an exploration of a topic and task that Local government finance for the urban infrastructure construction in all countries of the world. As the example analysis, this paper chose the United States and Japan which more successful in the use of local government debt funds for urban infrastructure construction. Analysis and summarize the beneficial experience, provide the reference to local government financing in China, and based on its national conditions and current situation, puts forward some countermeasures and Suggestions on the existing problems, that is, this paper discusses another important problem. The article puts forward opinions and suggestions from four aspects:one is to perfect the existing financial system, make the local government’s rights of finance and affairs matching; The second is to promote the transformation of government functions, clear defined the scope of government functions and strict appraisal system; Three is to develop a sustainable financing way, to promote local government bonds, government and social capital (PPP) financing model of cooperation, deepening the reform of financing platform; Four is to establish and perfect the financing system of local government. including financing of risk early warning mechanism, supervision mechanism, laws and regulations safeguard system, local government information disclosure system and credit evaluation system.