A Research On The Risk Pre-Warning And Aversion System Of Local Government Debt

Debt issues as well as crises of major global economies have captured wide atten tion in recent years. Starting 2010, the Chinese government has adopted proactive fiscal measures and prudent monetary policies, local government still suffer from sev ere debt crises with increased amount of debts.Under such circumstances, effective measures are urged to be adopted to avoid financial or social crises may be incurred. Debt crises are a nightmare of local govern ments and pose a major hazard to China’s social stability and economic safety as they are key to livelihood.This essay first analyzes foreign studies and puts forth an analysis framework for debts facing local governments and an index system for risk pre-warning. This article mainly includes the theoretical analysis of local government debt, the system of Local government debt risk identification index, economic and financial indicators analysis of local government, and the analyze of composition and proportion of the A District.The essay later elaborates on the establishment of a risk pre-warning system for local government, focusing on the connotation of the system and the identification of r isks at different levels. And to build A government debt risk early warning index system on the premise of specific data of A district government.At last, the essay details the building of a system against debt risks facing local g overnments, covering basic principles for risk management and control as well as the creation of relative policies. This essay first introduced the the basic principles oflocal government debt risk management, secondly, the management of the direct liabilities and the contingent liabilities,The essay is aimed at providing policy suggestions to local governments.