Legal Regulation Of China’s Local Government Debt Risk

Borrowing is an important way for the government to solve the imbalance of government revenue and expenditure.There is a serious imbalance between the central government and local governments in China in the division of financial power and power.limited financial resources,local governments have assumed more functions of public administration,resulting in serious financial imbalance.In order to better fulfill government functions,local governments raise funds by issuing local government bonds and borrowing from banks,so as to solve the problem of financial imbalance of local governments.Throughout the world,local governments have different scales of debt,local government appropriate debt can promote local economic development.However,excessive borrowing not only fails to promote economic development,but may even inhibit economic development,generate debt risks,intensify social conflicts,which a little bit of legislation must be taken to regulate the risk of local government debt.China’s local government debt has the characteristics of large debt scale,hidden debt,management is not standard.Although the debt scale has not yet exceeded the government debt warning line,the excessive growth rate,huge scale and the phenomenon of too many hidden debts contain huge risks.Once the outbreak,it will seriously affect China’s economy,culture and politics,and produce adverse effects.At present,the risks of local government debt in China mainly include political risk,economic risk,social risk,legal risk and implicit risk.These risks are mainly caused by the confusion of local government debt management,the imbalance of financial revenue and expenditure and the weak risk consciousness of local government.Although our country has been through the constitution,the laws,administrative regulations and departmental rules and other legal documents on local government debt risk to carry on the legal regulation,but the principles of the constitution,the laws,administrative regulations,department regulations,local regulations chaos,low level,and the local government debt is complex,large quantity,borrowing a variety of problems,The legal documents regulating the risk of local government debt in China still have deficiencies,which need to be perfected and improved so as to better regulate the possible risk of local government debt.At present,the legal regulation of local government debt risk in China has certain legal defects,mainly including the legal supervision of local government debt is insufficient,the legal regulation of local government illegal borrowing is insufficient,the legal system of financial transfer payment is not perfect,and the legal mechanism of local government debt repayment is not perfect.It is because of these problems that the risk of local government debt in China is increasing,which seriously affects China’s economic development.Therefore,we must put forward corresponding suggestions for this part of the problem,and effectively regulate the local government debt risk in China.First of all,the legal supervision of local government debt is insufficient,so we should strengthen the legal supervision of local government debt.On the one hand,we need to improve the legal system of local government debt information disclosure and strengthen the transparency of local government debt,so as to strengthen the supervision of local government debt by the public.On the other hand,we need to improve the legal supervision of local government debt,unify the judgment standards in the audit supervision of local government debt,so as to strengthen the audit supervision and solve the problem of local government hidden debt.Secondly,aiming at the shortage problem of debt of local governments to violation of the rule of law regulation,on the one hand,we properly solve the problem of local government legal borrowing authority is too small,appropriate to expand the local government for creditor’s rights,on the other hand we need to increase in violation of local government debt accountability laws and regulations,make local governments can’t illegal borrowing.Moreover,in view of the problem that the legal system of local financial transfer payment is not perfect,we can improve the legal provisions of financial transfer payment,ensure the implementation of financial transfer payment,reduce the financial pressure of local governments.In the end,the local government debt law mechanism is not sound,we need to build legal mechanism of local government debt,from a legal strict requirements on local government debt should be based on the debt paying ability,and strictly control the local government debts due and not timely repayment of the adverse consequences,regulation of local government debt on schedule may be caused by risk.