Research On Questions Of The Local Government Debt Information Disclosure In China

Since2008, rapid expansion of the local government debt scale in our country hasaroused wide concern at home and abroad. Nowadays, huge debt scale shows the lowefficiency of using Economic resources of our local governments, and has set up a threat tofinancial and economic soundness of the local government, which has seriously affectedthe improvement of local government performance and the performance of localgovernment’s responsibilities and functions. In our country the government’s goal is tobuild a modern service-oriented government. The local government is responsible for thelegislative authority and the social public in safekeeping and use of economic resourceseffectively. That means fiduciary responsibility of the Local government.It includes thesource and use of financial resources, local government’s financial activities, the currentfinancial position and operating results, and other physical and financial resourcesinformation, etc. Huge debt scale and high debt ratios suggests that the local governmentfinancial situation is grim, which is likely to trigger a financial crisis and is adverse to theperformance of the fiduciary duty of the local government. In order to fulfill the publicfiduciary duty, the local government must strengthen the management of its debt scale,reduce the debt risk, and improve their financial situation. Generally, debt theory simplydoesn’t solve problem, the local government must establish the normalized debtinformation disclosure mechanism, to prevent the happening of the risk of local debt ininstitutionalized means, so the local government can perform the fiduciary duty.Information disclosure of the Local government debt refers to recognize, measure,record and report the behavior and results of the local government liabilities through aseries of accounting means. In the current, under the condition of huge local governmentdebt, information disclosure of the local government liabilities can increase transparency ingovernment debt, which is advantageous to the government to improve the financialsituation and business performance and reflect fiduciary duty. Based on information disclosure of the local government debt as the research object, first of all, this paperdiscusses the concept, classification of the local government debt and the relevant theory ofdisclosing government financial information, and then discusses the deficiency existing inthe current information disclosure of China’s local government debt and the reason. Finallybased on the experience of disclosing local government financial information in thedeveloped countries, this paper puts forward some countermeasures on improvinginformation disclosure of the local government debt in China.