The Comparative Study Of Local Government Debt Risk In Pan Pearl Nine Provinces

After twelve years of cooperation of Pan Pearl Nine Provinces area, in 2016, the cooperation areas is constantly expanding and cooperation depth is strengthening. In addition,in 2016, Pan Pearl Nine Provinces' role in constructing the "One Belt and One Road" is emphasized, the importance of the stable regional economy and healthy operation is self-evident.Government dominant force in regional cooperation is Pan Pearl Nine Provinces'important characteristics, the government cooperation help to promote the coordination mechanism, and the resources optimal allocation. But at the moment, the provinces have accumulated a certain amount of government debt, the potential risk of which will impact the cooperation between the government and the regional economic in a negative way. Once debt risk exposure in the one local area happen, it will transfer rapidly by many channels to other provinces. At the same time, the Pan Pearl Nine Provinces have characteristic of eastern, central and western regions and the nine provinces presents gradient economic development, so it can help to have a understanding of the rest of the country's local government debt risks.Based on the regional cooperation in Pan Pearl Nine Provinces present situation, this paper collected the data of nine provinces from 1995 to 2015, using the KMV model, set up 30% and 40% guarantee rate, assess the local government debt default risk in 2016 and 2017.And given the guarantee rate of 40%, calculated the security size of the debt. According to KMV model as a result,this paper concluded that,in a short time,by issuing displacement debt, establishing local and regional sinking fund, perfecting regional risk monitoring mechanism are ways to prevent local government debt risks. From a long-term point of view,strengthening political mutual trust, promoting regional cooperation, increasing the efficiency of the funds and enhancing the capacity of local government fiscal balance are the feasible ways for local government to resolve the debt pressure.