Study On Credit Risk Of China Urban Construction Investment Bond

Along with the huge demand of urbanization on the urban infrastructure project funding, local governments in the case of insufficient financial resources are often used as a guarantee of government revenue or project revenue, by directly issuing bonds to finance, which abroad called municipal bonds. Our nation’s tax system reform, although to some extent, promote the rapid growth of the local economy, but at the same time lead to the central government and local governments on property rights and transaction not, with the accelerated process of urbanization, local governments in urban the growing financial pressure on the construction of infrastructure and other public welfare projects, local governments pursuit of GDP and achievements, so that the local government financial funding gap continues to expand.As the current economic environment and financial institutional framework under an alternative form of municipal bonds, the city voted bonds issued indeed better to solve the problem of the absence of funds of the local government. However, in the process of rapid development, the city voted bonds gradually exposed many problems and caused widespread concern of regulators and investors. Depth study of urban construction investment bonds to regulate the development of urban construction investment bonds, deepen our local government reform of investment and financing mechanism to speed up urban construction so as to drive the development of the economy as a whole, has a far-reaching economic and political significance.Credit risk for urban construction investment bonds is from the city investment company’s business risk, the three areas of the city investment bonds existing system of risk as well as local government fiscal risks given elaborate. Business risks UDICs mainly project benefits low, corporate governance structure confusion and other problems; urban construction investment bonds system in the risk of major performance out of urban construction investment bonds of inadequate supervision, lack of relevant laws and regulations, urban construction investment bonds company mutual guarantee more serious measures are not sufficiently increase trust issues; the local financial risks mainly in local government debt is too much debt opaque.Nowadays scholars at this stage of municipal bonds and urban construction investment bonds have obtained more achievements, but most of them set in the municipal bond system level, the lack of systematic research on urban construction investment bonds. This will be the theoretical basis of municipal bonds, urban construction investment bonds causes, running status and future development direction for clues to their study, in order to form a more systematic study framework.How to guard against the risk of default that may exist in urban construction investment bonds, the paper argues that local governments must first control the size of the debt, strengthen the supervision of the local government debt, followed by even gradually improve the system and the laws and regulations of urban construction investment bonds. Future development path for urban construction investment bonds, the paper argues that the investment on debt to undertake welfare financing or construction task and mainly rely on financial capital UDIC should gradually withdraw from the city market, the financing task of local government bonds issued by local governments (CIC general obligation bonds); stable operating income and welfare project tasks undertaken mainly rely on their own income to repay the debt UDIC can turn to the issue of revenue bonds; City only assume the task of non-public welfare project financing turned to the issue of corporate bonds.