The Research Of Sub-provincial Government’s Debt Financing Legal Issues

According to the 2014 revision of the "budget law" article 35 regulation,among the four levels of the provincial,municipal,county and township governments,it only allows the province government to borrow money within the limits set by the state council.However,in practice,the sub-provincial governments still borrow money in a variety of ways indirectly.For example,governments make a commitment to guarantee minimum return in the Public-Private Partnership(PPP)project.It changes the nature of cooperation and risk sharing;Some local government funds undercover the essence of the “real debt” by promising repurchase the shares of the social investors unconditionally.As a whole,our country just sets up the principle framework of prohibition for the sub-provincial governments,but it does not provide regulatory basis for the practice of massive debt financing.It leads to uncontrollable debt risks.Therefore,this article focus on the sub-provincial governments debt problem and regulates the behavior of the sub-provincial governments debt financing by prohibiting illegal debt financing,perfecting the re-lending system,improving internal risk control and external restraints.The thesis is divided into four parts besides the introduction and conclusion.The first part is “the sub-provincial governments borrowing: a neglected issue of local debt regulation”.Analysing three realistic motives of urbanization construction,mismatching of financial revenue and expenditure,limit of original financing channels and short supply of debt system,the paper shifts the focus to sub-provincial governments debt financing which has been neglected and delineates the scope of discussing.The second part is “the current situation and the legal problems of sub-provincial government’s debt financing”.It summarizes the running status of re-lending system of sub-provincial governments and the problem of illegal debt financing,extracts subprovincial debt financing problems and analyzes the root cause of the problem.The third part is “the path selection and the concrete principle of the construction of sub-provincial government debt financing system”.The sub-provincial government’s debt finacing system is divided into four types: market constraint,mutual consultation,institutional constraints and administrative control.On this basis,combining with China’s market situation,fiscal rule of law,administrative control effectiveness and other factors,it puts forward regulatory path and principle of subprovincial governments debt financing specification.The fourth part is to put forward “the system concept of regulating sub-provincial government’s debt financing”.Specifically,on the basis of three principles,correspond to five problems,it proposes some solution to sub-provincial governments debt financing problems by prohibiting illegal debt financing,perfecting the re-lending system,improving internal risk control and external restraints.