Rearch On The Development And Transformation Of Local Government Financing Platform In China

Local government financing platforms once played an important role in Chinese economic stage has encountered bottlenecks.Looking back on the platform’s development history for more than 30 years,which undergone several twists and turns.The financing platforms originated from the reform of the tax sharing system in 1994,and then flourished during the outbreak of two economic crises.Platform company emerged in succession,which effectively alleviated the pressure of local government construction fund shortage,but also hidden many defects.In recent years,a series of regulatory documents issued by the country have only made its future development even worse.Therefore,the financing platforms actively seek self-transformation.This paper provided review of the development and transformation of financing platforms.Then,this paper took the public product theory,regional finance theory and principal-agent theory as the theoretical basis.The paper analyzed financing platform’s problems and the need for transformation,sort out several transformation paths.This article took Shanghai Chengtou Group as the research object,based on the development status of Shanghai Chengtou Group,this paper analyzed the financial situation of Shanghai’s regional economy,then analyzed the motivation of Shanghai Chengtou Group’s transformation and the measures adopted in the transformation.Next the paper used financial analysis and non-financial analysis to compare the before and after of Shanghai Chengtou Group’s transformation.Based on the experience of Shanghai Chengtou Group transformation,the paper put forward some suggestions for financing platform’s transformation,this paper consided financing platforms on the one hand should through improving asset quality,enhancing profitability,and focusing on corporate governance to strengthen its own operational strength,on the other hand need need rely on favorable policies issued by the state and support from local governments.Thus,the article studies local government financing platforms’ transformation and selects Shanghai Chengtou Group as a case study,which can help financing platforms clarify the development direction and provide its successful transformation experience when the local government financing platform is facing the transformation decision,which has certain reference significance.