The Current Situation And The Transition Of Local Government Financing Platform

With the expanding of China’s local government debt, local government debt risk and credit risk gradually exposed, the regulators of the State Council began to focus on regulating the behavior of local government debt, the local government financing platform is faced with the risk of being cleared. In October 2014, the State Council issued the number 43 File. The core content of the number 43 File can be summarized as the following: for the current stock of debt reduction will not increase, lock in stock; normalized local government debt financing mechanism; stripping financing platform for the function of government financing. The maximum effect of this policy for financing platform is to strip the function of financing for government, clearly divide the boundaries of government and enterprises. Therefore, the transformation of financing platform is very difficult. In this paper, through analysis of the case of Shijiazhuang State-owned Holding Investment Group, studying its current transformation, I make some suggestions for the transformation according to the actual situation.This article firstly makes a brief overview on our country development course and current situation of the development of local government financing platform, then analyzes the common problems in the development of local government financing platform. These problems are the single financing channel, financing platform “institution of government and firm integrated”, the financing risk concentration, insufficient sustainable financing ability, lack of constraint mechanism, and the information such as assets and liabilities is not transparent. Based on the analysis of the common, I select Shijiazhuang State-owned Holding Investment Group this case to analysis, to introduce the development history and status quo, and summarizing the problems and difficulties in its operation. The existing main problems are that the control of assets is not strong, in the process of development one-sided emphasis on the financing ability, the company possesses powerful administrative color but weak capacity for independent decision, corporate operation become a mere formality, it remains to be expanding financing channels. Later, introduce the transformation measures taken by State-owned Holding Investment Group under the background of the current implementation, we can use the operation mode of the domestic several typical financing platform forreference, and then puts forward suggestions on the transformation of the State-owned Holding Investment Group development. The State-owned Holding Investment Group may comprehensively integrate subsidiaries step by step on the basis of perfecting corporate governance, in order to obtain long-term development still has to win support from the government and broaden the financing channels, finds a clear positioning function in the development of the future. The final research conclusion: there are complex relations between local government financing platform and local government, the relationship is difficult to change; Financing platform has played an important role for urbanization in the past, but accumulated more contradictions, so must seize the market opportunity in order to obtain the long-term development; The transformation of The State-owned Holding Investment Group need take the experience of other cities, formulate suitable strategic planning and transformation direction, actively seek local government support, gradually break through traditional concept to seek long-term development.