Research On The Improvement Methods Of Local Government Investment And Financing Platform Company

Financial right game between the central government and local government continued throughout the various historical periods of China. Because of nowadays rapid economic growth, this game has a new development. The current tax sharing management system clear the boundaries of financial right between the central government and local government, but also make local governments’financial right do not match their administrative responsibility. In order to take balance between local governments’financial right and administrative responsibility, much of methods have been exercised. One kind of method which is widely used is the local government investment and financing platform company. Especially in2009, under the background of the expansionary fiscal and monetary policy response to the global financial crisis, the local government investment and financing platform company made a rapid development. The local government investment and financing platform company have made strong support for local economy, at the same time, plenty of debt have been formed. After check up by the central ministries, local government investment and financing platform companies’debt scale was under control, however, local government investment and financing platform companies will keep a continuous development by the impact of the development trend of urbanization. So in the long term, the management system of the local government investment and financing platform company should be consummated, and this is what the article focus on.This article first describe the basic situation of local government investment and financing platform company, to explore development and problems of platform companies, then explain the usual situation and supervision of some representative cases to form the general shape of the platform company system, make the new style local government investment and financing platform company as a kind of special state-owned financial enterprises, and then use the theoretical tools to analyze the platform company system, make the platform company system administration of local government embraced into the company’s ownership structure.Theoretical tools which used in this article will be applied in the first chapter. contains the theory of property right, corporate governance and financial regulation. Some other theoretical tools which are used as general background are not mentioned here.The second chapter describes the basic situation of the local government investment and financing platform company. At first, it describes the basic concepts of local government investment and financing platform company system, and the historical development of platform companies, especially the development in the form of institutional innovation influenced by the expansionary fiscal and monetary policy based on the central government response to the financial crisis in2008and2009. Platform company take shape of fiscal risk and financial risk after this wave of rapid development.The third chapter first describes the general operating mechanism, it shows the relationship between local government and platform company, and then point out that the ways to improve the efficiency of platform company system should be seek out from this relationship. Then it describes the process how to take the use of theoretical tools to analyze local government investment and financing platform company.The forth chapter shows some specific policy recommendations for the improvement of new and efficiency system of local government investment and financing platform company.