A Study On The Legal Problems Of The Exit Mechanism Of Local Government Financing Platform

After the financial crisis in 2008, the central government bagan to implement the total size of 4 trillion yuan economic stimulus package, all levels of financing platform growth spurt. In June 10,2010,in order to cope with the financing platform of financial risk, the State Council issued "notice on Relevant Issues Concerning Strengthening the management of local government financing Platform", make a comprehensive clean- up of platform debt decision; Then in April 30,2014 the State Council issued "on the deepening economic reform in 2014 focused on the task of opinion " clearly stipulates that "stripp ed financing functions of local government financing platform"; In O ctober 2,2014,the State Council promulgated the "on the strengthening of local government debt management advice" reaffir med "once again stripped financing functions of government financing Platform C o, the financing Platform shall not increase in government debt". At the same time, the newly revised "Budget Law" also gives the local government limited right to issuing bonds, therefore, local government financing platform exit inevitable.Idea of public finance in the allocation of social resources should follow the principle, government financing should all put into public welfare projects; Project division theory points out that adopting different models of governance for different types of projects, also pointed out the direction for the local government financing platform for the orderly exit. Power determines the financial theory affir med the legit imacy of local debt, the issuance of bonds by local government can directly reduce the high risk of plantforms ’ debt for the blind to the financial system.The author examine the reasons for the existence of government financing platform, historical evolut ion, puts forward we should dialectical view of local government financing platform in the development process of urbanization. Since the introduction of the policy in a relatively short time, so there are many different views about boundaries in practice and how to solve the financing platform of local government debt stock. Author put forward innovative local government financing platform in regulations, face legal problems in the process, and after the successful experience at and abroad for reference, put forward to resolve these legal issues:First of all, there are problems of low rank, the lack of guidance of the detailed rules for the implementation of normative documents of local government financing platform financing platform, resulting in reality do not know how to exit, how to transition, the author thinks that by improving legislation, make institut ional arrangements for the long- term risk of local government debt, the introduction of relevant implementation details as soon as possible, to guide the financing platform exit normatively.Secondly, the contradiction between the government credit and the implic it guarantee, the government needs to take into account in a balance way. which can learn from the “Company Law”, such as: The government investment of local government financing platform, only limited to the amount invested in debt financing platform to take responsibility, taking into account the stability of the social order, the government can not by a paper document that decoupling and financing platform. The government and the platform in order to reduce the burden of debt may buck-passing the debt, which if the debt is included in the government budget through the financing platform loans should be borne by the government, as the government debt in the futur e through the issuance of government bonds to complete the replacement, is zoned for financing platform debt through debt the reorganization of the way, try not to the financing platform for the imple mentation of the bankruptcy liquidation. In addition, local government should bear the proof responsibility of the debt’s ownership.Thirdly, the financing platform responsible for many infrastructure projects, once the exit could cause massive funding gap, due to the lack of responsibility and the emergence o f "unfinished", so it is very important to do a good job between local government bonds and financing platform exiting, to establish the withdrawal mechanism of the scientific development concept, to inform the local debt can only be used for capital expenditure and repay part of the debt stock, the debt stock proportion also needs to be controlled, the current C hinese government to encourage the promotion of the PPP model is a good try. At the same time it also needs to set up financing platform out of the buffer system, allowed to keep pure the public nature of the financing platform can help the government to better complete the functions of the provision of public goods.Finally, the financing platform lacked of effective external supervis ion in the whole process, this should not only broaden the channels of supervis ion, the local people’s congresses, financial institutions should take regulatory responsibility of financing platform, but also improve the information disclosure system of financing platform, strengthen supervision of the independent third party.