The Measurement And Prevention Of Local Government Debt Risk In The Process Of Construction Of New Urbanization

The construction of new urbanization makes new investment demands on the Public finance expenditure,while the local finance is facing with the situation of less income and living beyond its means. Under the circumstances of the increasing of the public investments and the limited government receipts, the debt financing has became the rapid and effective method to solve the problems above.Nowadays, the construction of new urbanization under the situation of unequal financial power and administrative power catalysts the scale debt risks of local government. The channel of financing platform for the construction of new urbanization intensifies the structural debt risks in local government. The vague awareness of responsibility among debt payers results in debt management risk in local government. Financing mode with land as the leverage worsens the debt payment risk in local government.Under such background, a measurement indicator system shall be built from four aspects including scale risk, structure risk, management risk and payment risk of the local government debt. The entropy value method shall be adopted to measure the debt risk of the local governments in Chinese 30 provinces. The study found, east local government debt risk is relatively outstanding, nation wide local government debt risk similar structure, the middle part and west local government debt risk management is worrying, and government debt repayment risk is particularly evident in Western areas. Afterwards, default probability of government in different borrowing scales is measured by way of revised KMV model to find that the safe and proper borrowing scale of local government in China. Compared with the debt that the government is responsible for repayment, it is indirectly found that the debt of local government exist default probability, but the probability is small and it can be controlled in general.According to the evolution trend of the debt risk of local government during urbanization construction, propose the countermeasure. In the aspect of debt management, improve the warning mechanism of debt risk of local government, carry out the comprehensive report mechanism of government, optimize debt budget management and set sinking fund reserves. In the aspect of new urbanization construction, firstly, accelerate the construction of local tax focused on property tax and build stable income growth mechanism of local finance. Secondly, improve assessment system and strengthen the sense of responsibility of subject of debt repaying. Finally, strengthen the regular management for land use and provide sustainable fund resource for debt repayment of local government. In the aspect of matching mechanism reform of preventing the debt risk of local government, firstly, deepen the reform of fiscal decentralization mechanism. On one hand, accelerate the transformation of government function, properly define the boundary of government and market and divide the administrative power and duty of expenditure. On the other hand, perfect local tax system and gradually rationalize the income distribution of central government and local government. Secondly, improve transfer payment system by way of adjusting transfer payment structure, optimizing financial transfer payment mode and accelerating the construction of financial transfer payment legal system. Finally, timely launch the government bonds of local government bonds and peel the financing function of government and government.