Research On Transformation And Development Of Local Government Investment And Financing Platforms

The tax reform led to a mismatch between local government finance rights and administrative rights in the 1990 s.The local government is facing a major investment demand to promote urbanization process,but the old "budget law" limits the local governments to issue bonds,tightened its sources of funding channels.Local governments lack adequate funding for infrastructure and public services and financing platform arises at the historic moment.The scale and development speed of the local government investment and financing platforms have been greatly improved in the past decades.They have indeed played a crucial role in solving the fiscal financing gap of local governments,and made historical contributions to improving local infrastructure construction and improving local economic level.At the same time,this pattern also hides a huge financial risk,brings the huge debt burden to the local government.Defects in its management system can easily lead to economic crisis,which also leads to overcapacity in some industries and overheated investment in some regions.Under such circumstances,a series of government policies have been introduced to force its transformation.Under the new situation,the local government investment and financing platforms have to divest the government financing functions of the financing platforms,realize the de-platforming operation,enhance their hemopoietic function,and independently participate in the market competition for the purpose of making profits.This paper analyzes and studies the historical evolution of the local government investment and financing platform company,makes a comprehensive and in-depth analysis of the concept,classification,relevant theoretical basis,operation mode and transformation strategy of local government investment and financing companies,summarizes the current policy environment,development status and common problems of local government investment and financing platforms,and select A platform company as the case of this paper for analysis.It is concluded that the transformation of local government investment and financing platform specific direction through literature analysis,theoretical research and practical analysis.Firstly,the local government investment and financing platform shift follows the principle of the classification principle,economic benefit and social benefit balance principle,the principle of separation of government and enterprises and the principle of seeking truth from facts;Secondly,the strategies for the transformation of local government investment and financing platforms include the positioning of market-oriented investment subjects,the integration and optimization of resources,the realization of diversified development,the widening of financing channels,and the adoption of PPP model to participate in the construction of public infrastructure.Thirdly,the measures in the transformation of local government investment and financing platform includes local government level which includes establish risk early warning mechanism,pay attention to regulation,set up scientific performance appraisal method,establishing the project accountability system,improve information disclosure system,improve the system ofgovernment investment,and financing management establish a mechanism for government investment and financing service,and local government investment and financing platform level which includes to establish a modern enterprise system,scientific market positioning,fair to participate in market competition,innovative business model.The conclusion is that the local government investment and financing platforms achieve positive development by optimizing the transformation.