The Risk And Dissolving Risk Of Local Debt Issues Under The "New Normal"

This article mainly talked about the local debt risk under the new normal and how to dissolve the risk. As China’s economy changing from high speed growth to medium speed growth, the economic structure continuously improving steadily, and factor-driven, investment-driven turning to innovation-driven, China formally entered into the "new normal." Local debt has played an important role in promoting economic development and urban construction in China. But the risk of the local debt has emerged. The risk of the local debt mainly comes from the aspects of market, government and society. The management and how to dissolve the risk is generally a question to the local government under the new normal.The State Council approved a total 2 trillion replacement amount of local debt in March 2015 and in June. The debt replacement not only won the time and reduce the interest on the debt for the local government, but also set aside part of the funds to support the real economy for the local government. The debt replacement put off debt repayment time, which resolved the debt risk in the short term, but it is not a permanent solution.Based on the analysis of the size and structure of the debt, the reasons for the formation of debt and the construction of the Debt Risk Evaluation System, analyzing the debt situation exemplified by Z Town, using empirical analysis to calculate and analyze the debt index system, and learning the reason, influence and inspiration from foreign debt crisis, to give advice to dissolve the debt risk under the new normal.