Research On The Current Situation And Countermeasures Of Local Government’s Implicit Debt In PPP Projects

In recent years,China’s local government debt has continued to climb,especially the problem of hidden debt,which is hidden and persistent,and has become one of the important sources of systemic financial risk in China,with the debt rates of Tianjin,Guizhou,Inner Mongolia,Qinghai,Liaoning,Ningxia,and Yunnan provinces being particularly prominent.The fact that local governments have raised large amounts of debt indicates that there is a significant gap between their fiscal spending authority and fiscal revenue,especially under the macro fiscal system of tax sharing,which is difficult to effectively address through other means.Against this background,the PPP model for construction projects(i.e.,the government-social capital cooperation model)came into being,which meets the financing needs of local governments to develop their economies and carry out large-scale infrastructure construction,while adapting to the central government’s total control over the country’s overall debt.However,precisely because PPP projects have the characteristics of transferring and disguising government debts,their hidden risks of hidden debts of local governments cannot be ignored.Therefore,the questions of whether PPP projects will trigger fiscal and financial risks and whether they will become a way for local governments to raise debts in disguise have aroused great concern in both theoretical and practical circles.Scholars at home and abroad have conducted many researches on the concept and application of PPP construction mode,and formed a consensus that the essence of PPP mode is a financing mode.Due to the investment characteristics of PPP mode construction projects,local governments have the motive to introduce social capital to participate in investment,construction and operation,so as to relieve capital pressure.As for the implicit debt of local governments and the PPP model,there have been studies in academic circles that correlate local government debt and PPP model,and even believe that PPP projects will cause debt risk of local governments.Based on this,this paper takes the local government debt problem as the background,defines the local government hidden debt in PPP projects,analyzes the mechanism of the role of PPP projects on local government hidden debt based on public goods and public choice theory and government debt theory,and takes the Kunming PPP project as an example to study the current situation of the local government hidden debt problem in PPP projects,and then proposes corresponding preventive measures Chapter 2 introduces the concepts of PPP model and implicit government debt,and systematically explains the definition of local government implicit debt in PPP projects.Chapter 4: Study on the current situation of local government hidden debt in PPP projects,taking the conclusions of Chapter 3 as an example,uses mathematical and financial methods to analyze the economic data,financial data and PPP project data of Kunming City to study the current situation of local government hidden debt in PPP projects.The current situation of hidden government debts;Chapter 5,Suggestions and countermeasures for preventing and resolving hidden local government debts in PPP projects,systematically proposes countermeasures and suggestions for preventing and resolving hidden local government debts in PPP projects from the policy-making and implementation levels;Chapter 6,Conclusion and outlook.The findings of this paper show that:Firstly,PPP projects do not imply debts,but may form debts of local governments.From a macroscopic point of view,the expenditure responsibility that local governments need to arrange from their budgets for all PPP projects in each year,which exceeds the upper limit of their affordability will form local governments’ hidden debts.Secondly,the mismatch between fiscal expenditure responsibility and financial capacity,behavioral deviations of different interest subjects and institutional deficiencies are the 3 internal causes of PPP projects causing hidden debts,fiscal affordability and fiscal sustainability are the 2 external macro determinants,and the failure of fiscal affordability assessment is the ultimate realistic path of PPP projects forming local government hidden debts;finally,from the actual status quo of Kunming City,PPP projects eventually The extent to which PPP projects constitute debt is directly related to macro factors such as the financial capacity and economic growth of local governments,and have evolved into hidden government debt,overdrawing the future financial resources of local governments.The research in this paper defines the local government hidden debt in PPP projects from a jurisprudential perspective,and analyzes the local government hidden debt situation in PPP projects from different dimensions with representative regions as cases,which can provide references and bases for policy formulation and relevant decisions.The characteristics and innovations of this paper are mainly reflected in the research perspective and the systematicity of the research:First,this paper defines the local government hidden debt from a macro perspective,finds the entry point of the research,simplifies the chain of the research,and strives to grasp the law from a macro perspective and find the strategy from the root.Secondly,the systematic nature of the research,this paper analyzes the problem of local government hidden debt in PPP projects from different dimensions according to the external causes of the formation of hidden debt in PPP projects,and comprehensively analyzes the inner connection between PPP projects and government hidden debt.