Research On Early Warning Of Local Government Debt Risk In Shandong Province

Local government debt in Shandong Province has complex characteristics such as long loan terms,high debt repayment ratio,huge scale,strong concealment,and low efficiency in fund utilization.But the government debt is issued by the government credit endorsement,guaranteed by local fiscal revenue and project completion income,with high credit and low risk,and deeply favored by creditors.The hidden debt risk under the accumulation of high debt may quickly spread outward through channels such as internal transfer of government departments,credit guarantees from superior and subordinate governments,transmission of economic market interest rates,and financial institution fund management.The issuance of local government debt in Shandong Province reached a new high due to the initial impact of the epidemic in 2020.In the same year,it entered the peak period of government debt repayment,superimposing the suppression of economic development in the early stage of the replacement of old growth drivers with new ones,and various municipal governments in Shandong Province may face the risk of debt default.Based on the government financial data of 16 cities in Shandong Province from 2003 to2021 and government debt data from 2015 to 2021,this article uses qualitative and quantitative research to analyze the debt risk situation of each city in Shandong Province.In terms of qualitative research,a comprehensive analysis of the financial and debt status of Shandong Province and other cities shows that the current Dongying,Jining,Binzhou,Dezhou,Liaocheng and other municipal governments have great debt pressure,and there may be default risk in the next three years.In terms of quantitative research,the Two-way FE,Grey Model,and Holt-Winters were used,combined with the Credit Monitor Model,to predict the default distance and probability of local government debt in 16 cities in Shandong Province from 2022 to 2024.The results show that the default distance of government debts in cities such as Jining,Tai’an,Liaocheng,Weifang,Weihai,and Zaozhuang is less than four,and the default probability is significantly greater than zero.The probability of default in Tai’an City in the next three years has exceeded 18%,and the probability of default in Zaozhuang has exceeded 20% in 2023,indicating a relatively severe debt risk.Based on Moody’s global average cumulative default rate,a risk level analysis was conducted on 16 cities in Shandong Province.The results showed that Tai’an,Liaocheng,and Zaozhuang had the highest default probability and risk level;Next are Jining and Weihai,located at a higher risk level;Weifang is in the third tier,with a general risk level;The fiscal revenue and expenditure situation in Dezhou has been declining year by year,and it will enter the category of general risks in 2023.The higher the risk level,the more serious the risks and hidden dangers in the government’s current fiscal revenue and expenditure mechanism or investment and financing mechanism,and the government needs to be vigilant.To prevent government debt risks in cities such as Weifang,Jining,Weihai,Tai’an,Liaocheng,and Zaozhuang.This article proposes policy recommendations from two aspects:optimizing governance and strengthening external environmental constraints: expanding the fiscal revenue system,strengthening local fiscal constraints,optimizing and adjusting debt structure,promoting the clearance of implicit debts,establishing new monetary and fiscal relations,improving government assessment mechanisms,seeking a new type of win-win cooperation,and continuously strengthening audit supervision.