The Research On The Financing Problem Of JC Municipal Company A Local Government Financing Platform

Since the reform and opening policy, Chinese urbanization had experienced a continuous speeding up and had made great achievements; one of the most obvious symbol is the improvement of infrastructure. During the whole process, local government financing platforms, mainly municipal investment companies, had made significant contributions. Yet these financing platforms were faced with a serious of problems in their development, especially the county-level platforms. So it is of great theoretical and realistic significance to find out such problems and take out corresponding solutions, in order to help local government financing platforms to develop continuously and ensure the follow-up financing needs.Taking JC Municipal Investment Company, a county-level local government financing platform, as an example, this paper discussed its financing statement based on public product theory, infrastructure salability theory, financial growth cycle theory and pecking-order theory, etc. As the only financing platform in the county, although it experienced a rapid growth with the support from local government, JC Company faced many financing problems, such as high financing cost, unreasonable financing structure, relying on policy funds and insolvency risk, due to limitations from both the external financing circumstances and its own borrowing capacity. Then the author discussed the causes and reasons accordingly, such as lacking endogenous financing, weak credit rating, inadequate marketization and lacking financing planning. In the end, this paper proposed a series of measures according to the causes, hoping that this might provide solutions to solve these financing problems and improve the borrowing capacity of JC Company in its future development.