Investment Co., Ltd. In Kunming New Capital Financing Model

Chengtou Company is the main carrier of local government financing platform inChina, and the most traditional and common mode of financing for the platformcompany is “land+finance+credit funds”. Over the amount of urban constructioninvestment widening, debt risk and crisis triggered by excessive debt financingplatform caused a high degree of attention of the central government and financialregulators, which have issued a series of control policies, such as "strengthening localgovernment debt risk management and control, regulate local financing platform”.They began to aggressively clean up the financing platform, and control of thefinancing platform loans, leading the original financing model of the financingplatform to unsustainableLarge powers of local governments in China have a so "small financial building"that local governments are unable to do as much as they would like to. The demandfor local construction funds need to be solved by financing. However, the originalmodel has been severely hampered the situation, and how to build an effectivefinancing model has become an important issue that can not be evaded pendulum infront of local government financing platform.This paper presents the development of China’s local government financingplatform, analyses the status of its financing model, existing problems and theircauses, and researches on the financing platform how to build effective financingmodel. In reference to the literature about the development of local investment andfinancing platform and finance theory, the paper briefly summarized and discussedadvanced experience of foreign financing platform. As xindu Company for example,based on relevant theories and methods, the paper pointed out that the traditionalmode of " land+finance+credit funds " had been difficult to adapt to the needs ofthe future project investment and the company’s own development, and built the modeof "own hematopoietic+diversified financing.