Debt Risk Control Of Local Government Financing Platform From The Perspective Of Political Resource Curse

In 1994,China implemented the reform of tax sharing system,which led to the phenomenon that the administrative power and financial power were not compatible.In the central and local governments,local governments have set up financing platforms to borrow from banks and issue bonds.In response to the outbreak of the financial crisis in 2008,the central government issued 4 trillion yuan in relief funds to invigorate the market,local government financing platform has become the main carrier.However,while promoting the construction of urbanization,the debt risk of local government financing platform has become increasingly prominent.In 2014,the central government issued policies to "separate" the relationship between local governments and financing platforms.At this point,how to solve the local government financing platform debt risk has become a major problem.From the perspective of political resources,this study discusses the formation mechanism of the debt risk of local government financing platforms,and analyzes the reasons why the rich political resources aggravate the debt risk of local government financing platforms,that is,political resources have a curse effect on the debt risk of local government financing platform.The background of this case study is rapid expansion of Yunnan City Investment Group,were subject to disciplinary review and supervisory investigation,through the analysis of the operation and corporate governance of Yunnan City Investment Group,the existing problems are found,that is,rich political resources can easily lead to overconfidence,power rent-seeking and over-investment,and debt-type expansion,which can easily lead to the scale,concealment and chain of debt risk.These characteristics of debt risk hinder the resolution of debt risk,and put forward the basic idea of resolving debt,improve the internal governance structure of financing platform,reduce executive overconfidence due to rich political resources resulting in decision-making mistakes.Finally,the paper puts forward some countermeasures to deal with the debt risk of local government financing platforms,that is,through the reform of fiscal and taxation systems,local governments can increase tax revenue,increase fiscal revenue and reduce their dependence on local government financing platforms,at the same time,the government’s financial expenditure responsibility at all levels should be clarified,and the space of power rent-seeking should be narrowed.For the financing platform itself,the long-term solution to resolve the debt risk is to actively transform and upgrade,divest the non-performing assets and improve its own solvency.Of course,the responsibility of social supervision can also reduce the expansion of the scale of debt brought by the Information asymmetry,reduce the possibility of power rent seeking,and effectively avoid the occurrence of hidden debt risks.