| Recent years, our country has undergone accelerating period of the urbanization. Sub-national government investment companies take the responsibilities of fund-raising for various public infrastructure construction. As the project of 4 trillion yuan had been implemented since 2008, the sub-national government successively added investment in public infrastructure construction, which cause more problems of sub-national debts. With the help of debts, sub-national government improved the urban appearance and make things more convenient of living for the people. However, the debt scale expanded fast in the past years, in contrast with the limited financial income, which has caused sincere worry of national government and the whole society for the debt risk.In the process of financing for the public infrastructure construction, the sub-national investment companies brought out various problems. The sub-national investment companies raise money in different ways, undertaken great risk in complex guarantee relationships of each other, which result in great pressure of debt redemption for the sub-national government. There is no system specifications for fund-raising and management. At the same time, problems such as lack of information disclosure and supervision of fund use from any aspect also can be potential risk. Analyzing the reason for the defect of debt management and giving scientific advice on Chinese sub-national government debt management will be of great significance.This paper has analyzed different theories of debt management. Intergenerational equity theory proves the necessity of fund raising for public infrastructure construction. By learning the theory of fiscal decentralization, we can know the rationality of fund raising. Principal agent theory gives us the view to research on debt scale expansion. We can specify the objective of debt management by analyze power control theory and new public service theory. We can further give the connotation of scientific management of sub-national debt.Through analyzing the audit report of sub-national government debt of 2011 and 2013 released by National Audit Office, combined with current circumstances of government debt of a specific district of city N, this paper has organized the main problems of government debt management and the main reasons that lead to the problems. The valuable experience on sub-national debt management of the United States, Japan and Australia can be used as a good lesson for our country. Compared with the current debt management problems in our country, we can draw a reference point in the effective debt management, debt scale control, and actively carry out risk warning and public debt information disclosure.In the end,the author of the paper gives the advice on Chinese sub-national debt management. Firstly, the national government should carry on the reform of tax system so that the finance power and the duty of sub-national government can be unified. Secondly, the law system should be improved to promote the legalization process of sub-national government debt management. Thirdly, this paper expounds how to construct a scientific system of debt management, which includes the application of the local authority debt budget, debt scale control and taking measures to warn debt risk. Fourthly, we should establish debt supervision and information disclosure mechanism, to strengthen the supervision of National People’s Congress and the public. Fifthly, establishing a sinking fund to effectively guarantee the repayment of debt and resolve the debt risk. Finally, the author advise the sub-national government to expand financing proposals, using PPP to drive social capital to provide more public service. |
PDF Full Text Request