The Study On The Debt Repayment Of China’s Local Government In The"Post-Land Finance" Era

In the central economic work conference of2013, the local government debt problem was ranked as one of six major economic problems. Local government debt touched people’s nerves again and became a hot spot of economic research. According to the local government debt audit results of the whole country given by the National Audit Office, the local government debt balance is RMB15.885832trillion by the end of2012. The total of the local government revenue(including the central tax rebates and transfer payments) in China was only10.643997trillion yuan, so the local government debt ratios(the ratio of debt balance with the fiscal revenue) reached149%.How to repay so much debts became a big problem to all levels of the local government.Borrow new debts to repay the old ones or just rely on land sales? In fact, in the land finance era, the two roads were becoming more and more difficult for the local government had accumulated so much debt. Explore effective ways to solve the problem of local government debt, not only relate to the burden of local government financial but also concern to the overall situation of the development of the whole society.The direct purpose of this study is to provide some Suggestions for China’s local government debt repayment. This study based on the analysis of local government debt issues of our country is to explore debt repayment path of local governments in the "Post-Land Finance" Era. There are three questions must be answered when solving the problem of local government debt repayment. Firstly, how the local government debt produce? Secondly, what is the local government debt now? Thirdly, how is the local government debt repayment ability now? The first question is the root problem of local government debt repayment, because only figure out the reason of local government debt, can we substantially solve the problem. But the problem of local government debt repayment is a complicated which is not only a long-term, but also a short-term systems engineering. It’s not enough only to take the long-term into consideration, because what local governments faced is short-term repayment difficulties to a great degree. So, to solve the problem, knowing what the current situation and repayment ability of local governments debt are so necessary. The path of local government debt repayment in the "Post-Land Finance" Era which is explored in this study is divided into two parts. The first one is short-term countermeasure which place emphasis on solving pressing need. The second one is System construction which place emphasis on solving system condition that result in local government debt in the long run.According to this analysis, in order to analyze the formation mechanism of local government debt, the paper which is based on a series of related theory established a multi-factor analysis framework, such as "system innovation, institutional weaknesses and government action". In order to research the ability of local government debt repayment, this paper also build a local government’s balance sheet, with China’s reality, which connect the local government debt with the resources of local government. According to the analysis results of local government debt in the balance sheet and the formation mechanism, debt repayment path of China’s local government in the "Post-Land Finance" Era is divided into two parts. One is short-term countermeasure. The other is System construction in the long run.