People's Congress Supervision On Local Government Bonds Issuance Authority

Before the amendment of Budget Law in 2014,the local government cannot borrow debts by any method.But expenditure liabilities which local government assumed do not match revenue capabilities under China's current decentralized fiscal system.In order to meet the shortage of fiscal funds,local government issued bonds through financing plating companies and guaranteed debts through illegal channels.This kind of government debts are out of supervisions,the legal prohibition caused unrestricted power of debt financing to local government.The article 35 of amended Budget Law grant legal and moderate debt financing authority to local governments.That is,government of provinces,autonomous regions,and municipalities directly under the Central Government may appropriately borrow debts by issuing government bonds with approval of the State Council.This norm legalized and justified debt financing of local government.Since then,the State Council and Minister of Finance has promulgated opinions and regulations on administration of local government debts,established a relatively complete and comprehensive system of government debt management and supervision.Finance is the foundation of national governance,and the government which without financial fund cannot exercise any power.Finance is the quantitative expression of state power and government power.Essentially,local governments borrow debts is the exercise of debt financing power,and local government debt management is more than simple technical issues.Discussion and research regarding how to control and limit local debt effectively should from the constitutional perspective,and the perspective of division and allotment of power.The key to government debt management and limitation is to restrict and supervise the execution of debt financing power of local government via people's congress supervision.Government debt financing power is the source of government debt,sunder current legal framework in China,local government can only borrow debt through issuing government bonds,therefore this essay selects the power of bonds issuance as the research object to analyses the nature and operation mode of power which the process of government bonds issuance implied.People's congress supervision should be a dynamic management process which in accordance with the built constitutional order and principle therein.The execution of bonds issuance power is no longer only relies on the authorization of the empirical method,it has to be justified continuously in the current constitutional order.There is doubt that whether debt limits for different regions approved by State Council control debt size effectively,whether the limits determination procedure is constitutional and legitimate,whether the budget adjustment proposal approved by standing committee of the people's congress at the same level is effective.The current debt management mentioned above may be not useful as designers expected.Government bond statutory is the expression of tax statutory in the constitutional limitation on local government bonds issuance authority.This article demonstrates that only through legislative procedure,the debt limits approved by people's congress and under its supervision,can control the government bonds issuance authority effectively,and promote government to be diligent and frugal.