The Research On Local Government Debt Risk Evaluate And Early Warning System

Our budget law clearly stipulates local government in accordance with the principle of a balanced budget, do not contain deficit and borrow debt, unless allowed by law and the State Council. However, with the gradual advance of China’s economic reform, local government investment is growing, leading to the emergence of local governments different types of debt. Since 2008 the US subprime mortgage crisis, in order to maintain stable economic growth, our country put forward the "four trillion" investment plan, the local government to respond to the call of the central government, the blind expansion of investment, resulting in dramatic increase in the size of local government debt, while the government debt default behavior has occurred usually. At this stage, our local government debt risk management issues become increasingly prominent, which has aroused great concern, but also caused widespread concern in the international community.In this paper, starting from the current situation of government debt, the study of local government debt risk will provide a scientific basis for management of government debt.The main contents are as follows:Firstly, local government debt related concepts, describes the basic theory and relevant local government debt, using the method of statistical description and comparative analysis on the status of local government debt, and analyzes the reasons for the formation of local government debt risk.Secondly, on the basis of domestic and foreign government debt risk warning on the theoretical analysis, using principal component analysis and factor analysis to establish a government debt risk warning mechanism and government debt risk 28 Chinese provinces and municipalities to measure, in order to further understand the Current Situation of government debt risk.Thirdly, the US and Japanese government debt management system developed in depth analysis, derive valuable lessons, and then for our government debt management provides a good reference.Finally, drawing on US and Japanese government debt management on the basis ofexperience, combined with the status of government debt management, policy recommendations to prevent the risk of government debt.