Research On The Application Of Local Government Special Bonds In Public Infrastructure Construction

Public infrastructure is an important indicator to measure the level of local development and a major medium that drives local economic growth and social development.Looking back over 40 years of reform and opening-up,China has experienced the largest-scale and fastest urbanization in the world,the scale of investment in public infrastructure in various places has increased year by year with ever-expanding coverage,the sense of gain and happiness of the masses have continued to rise,and historic achievements have been made.These achievements are inseparable to government-led infrastructure investment and financing system of China,and large-scale construction of public infrastructure needs enormous funds.Against the backdrop of slowing growth of fiscal revenue and growing government expenditures year by year,lack of funding has become a core issue that restricts the rapid expansion of local infrastructure.Over the past one or two decades,local government has explored a variety of public infrastructure investment and financing models in practice based on the basic guideline of land finance,and these models offer crucial sources of funding for promoting infrastructure construction at a particular time and drive high-speed economic growth.But meanwhile they lead to an array of potential debt risks.As the new Budget Law was formally enacted in 2015,issuing local government bonds has become the only way of legitimate financing for local government,among which local government special bonds assumes the important functions of stabilizing investment,expanding domestic demand and improving weak links and it has become a major source of funding for the construction of local public infrastructure,which is of great significance to avoid and neutralize local government debt risks and maintain stable and sound economic growth.Since the scales of Chinese local government special bonds,especially newly-issued bonds,were expanded in 2015,especially since the Ministry of Finance issued project revenue bonds in 2017,local government bond market has been furtherenergized,types of bonds have continued to diversify,providing local public infrastructure construction with strong support.Yet,as a new financing and investment model,local government special bonds still has many imperfections in its application process,so further improvement is urgently needed.This article starts with expounding on the connotations of local government special bonds and public infrastructure,and analyzes the necessity of its application to public infrastructure construction by straightening out the development history of local government special bonds by virtue of the West's government bonds theory,public goods theory and fiscal decentralization theory.At the level of empirical research,this article takes the issuance,use and management of local government special bonds in H province as an example,focuses on analyzing the application of local government special bonds of the H province to public infrastructure construction with an introduction to the financial position of this province,and then identifies and analyzes the problems existing in the application of local government special bonds.Meanwhile,an explanation of characteristics and advantages of American municipal bonds is introduced.By performing a series of empirical analyses and learning from international experience,this article proposes countermeasures and suggestions for improving the application management of local government special bonds,with a view to help local government special bonds play a more effective role in investment and financing for public infrastructure construction,accelerate the pace of urbanization and prevent and neutralize local government debt risks.