| In 1990 s,in order to mitigate the suffering from central fiscal shortage,China promoted the financial system reform by dividing the rights of finance and affairs between central and local governments and setting up the fiscal transfer payment system.However,due to existing barriers like denormalization of the newly-established system and inadequacy of the tax structure,it was hardly possible to execute.Therefore,financing vehicles emerged as a main investment in local development.Endorsed by local government,the financing platform has been flourishing and expanding,and Quasi-municipal Bond has played an essential role in China bond market especially gaining large share in the corporate bond market.In June 2010,“the State Council's Circular Notice on Strengthening the Management of Local Government Financing Platform(No.19)” well defined the Quasi-municipal Bond widely acceptanced from all levels of government.Meanwhile,owing to a government guarantee,Quasi-municipal Bond became popular among investors and stepped into the vigorously growing stage.Nevertheless,investments related to public welfare projects,such as renovation of shanty towns and relocation of poverty relief,resulted in weak profitability,large volume of liabilities and over reliance of governmental financial support.To alleviate the undesired,the State Council promulgated “the Opinions on Strengthening the Management of Local Government Debt(No.43)”.Moreover,the “New Budget Act” issued by the twelfth NPC Standing Committee has been implemented since January 1,2015.The legal documents require liquidation of debt and cease of financial flows between local government andplatform companies,which eliminates the implicit guarantee and carries out strict supervision over the Quasi-municipal Bond market.This paper mainly focuses on Quasi-municipal corporate bond which is distributed most widely and has the largest issuing scale.The city investment corporate bonds issued during the 31 period from June 1,2010 to December 2017 were selected as sample data,and the sample data were divided into one sample and two samples in December 31,2014 as time segmentation points.Multiple regressions were performed on the data of the two samples.After comparing the regression results,whether the empirical results were consistent with expectations was observed.After preliminary analysis,the sample data is regressed by replacing the variables,and the differences between the two empirical results are obtained.Then,we will achieve the effect of the robustness test on the first empirical results.Combining the results of the two empirical studies for in-depth analysis,we will identify the specific changes that occurred in the Quasi-municipal Bond Market around 2015,and study the impact of the implementation of the No.43 and the implementation of the new budget law on the market.After studying the results of multivariate regression and robustness tests,we reached the following conclusions: After 2015,the implicit guarantee function of local government in the market of urban investment corporate debt has declined obviously.Investors gradually attach importance to the operating data and financial information of the platform company,and the difference between the rating agencies is no longer significant to the distribution cost.However,there are still some problems in the market,such as the implicit guarantee function not completely eliminated from the local government,investors' reliance on the rating results and so on.In this regard,this paper puts forward the policy suggestions of improving the financial data disclosure level of the financing platform,standardizing the comprehensive rating system of the rating industry,strengthening the risk awareness of the investors of the city investment enterprise debt market and improving the laws and regulations of the city investment enterprise debt market. |
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