Underdeveloped Regions In Local Government Financing Platform Issuance Of Enterprise Bonds Issue Research

《State Council has several opinions on further promotion of Guizhou’seconomy and society developing well and rapidly》(Guo Fa [2012] 2) point out :Guizhou Province is realizing a historic leap in a critical period. To overcome thebottleneck of weak transport infrastructure and fragile ecological environment, playthe importance of geographic conditions and the advantages of the rich mineralresources, energy, biodiversity, the potential development cultural tourism, the maintask of accelerating the development in Guizhou is to seize the significant opportunityfor in-depth implementation of the western development strategy, industrializationand urbanization. Moreover, presented to build a Qianzhong Economic Area as thecore of Guiyang–Anshun, and as the supporting by Zunyi, Bijie, Duyun, and kaili, tobuild a region developing according to the principle of " being driven by centralGuizhou, being promoted by northern, two wings crossing, and pushed forwardcoordinately ". Guiyang’s position of the central city, urbanization and objectives ofindustrial development has been elevated to new heights. To this end, Guiyang isbound to make the plan about corresponding construction of infrastructure andimplementation of major projects. Guiyang, however, the original economicfoundation is weak, lack of financial resources and existing enterprises, finance, thebank’s capital supply conditions which obviously can not meet the current hugedemand for investment, so we consider useing a innovative financing to help solve theproblem of shortage of funds for construction.This century in the increasingly intensive process of our country accelerating theurbanization and the government allocating resources, guiding the functionsdevelopment, the local government financing platform emerged, it overcomes theconstraints which the local powers do not match financial resources under the Chinesetax separated system, the transfer payment system is not standard and lacking of localgovernment borrowing system’s support, focusing on the use of bank credit andmaking it played an active role. Especially in alleviating the financial crisis, expanddomestic demand and promote economic recovery it played a key role inco-ordination with the Central Government. But in the context of inflation andmacro-tightening in recent years, the burden of government debt and the risk aboutthe local government financing platform company’s bank debt are highly paidattention to, the regulatory authorities are making efforts to check, clear and regulatethe bank debt of local government financing platform. However, in the long run, it will also play a unique role as an important way for government allocating resourcesin conditions of market, promoting growth, adjusting structure and other aspects.Recently, the way using city investment bonds which account for a small proportionof the liabilities of local government financing platform is paid attention to andrecommended by senior management and stakeholders. City investment bonds is aspecial corporate bonds government financing platform use the way of issuingcorporate bonds, equivalent to market economy country’s municipal bonds (localgovernment debt). By a sound corresponding system in the future, it is possible tostandardize to the form of municipal bonds and becomes the main financing tool forlocal government. At present, financing platform companies in transition should beconsidered as soon as, and use the existing city investment and debt financingactively.Beijing Chaoyang District resolved the its financing problems using the way ofissuing corporate bonds by state-owned capital management center in 2010. Localfinancing platform for financing is not only unique to developed areas, less developedareas can also use it to the problem of financing in their own development process.Based on this, this article learn the successful experience from Beijing ChaoyangDistrict government’s state-owned capital management center issuing corporate bondsand research Guiyang and other less developed regions’local government financingplatform to issue corporate bonds to solve problem of financing by comparingChaoyang District, Beijing and Guiyang.This paper first introduces the basic theory of corporate bonds and municipalbonds, on the basis of the principle of operation, focusing on the analysis to introducethe advanced experience of the United States and Australia’s experience in the use ofmunicipal bond, as well as the system designing of municipal bonds in developedcountries. Provide prospective development direction for our country’s municipalbonds, secondly explore the transformation about our country’s local financingplatform. Furthermore, analyzing and summarizing experiences on the basis ofBeijing Chaoyang District using city investment bonds to solve financing problems,pointed out the Guiyang’s disadvantages are projects with investing value is less, theaffiliated enterprises’assets quality and operating performance are poor, and lackingof talent; Its advantages are the natural resources are rich and have many minoritymajorities, we can consider the to develop new energy and tourism industry, the basisis weak but has more potential; what we need to address the main problem is to use local government financing platform to issue corporate bonds to finance for localsocial and economic construction; we proposed to reference the successfulexperiences from Beijing Chaoyang District’s state-owned capital management centerissuing corporate bonds to guide Guiyang City to take this mode to finance.