Chinese Local Government Debt Management Of Constitutional Government

From the perspective of civil law, debt is the debtor under the agreement or law to the creditor for a specific obligation of conduct which essence is a noninterest. Government debt which is a form of income that is the government to fulfill its functions, means government as the identity of the debtor issuing bonds at home and abroad (or to foreign borrowing) to raise the method to obtain that part of the revenue. According to different criteria, government debt has a variety of classification.Among them, debt can be divided into central government debt and local government debt based on debt subject. From economics, the local government debt is the government bonds that is issued by the local government to obtain financial income.It is listed in the local financial budget.which is used and repayed by local finance. From the legal point of view, the local government debt is meams: according with agreements or contracts ,the local government and their subordinate departments or independent agencies pay the funds to creditors in accordance with the provisions of the law as a debtor.The law of our country has not grant local governments the power to issue local bonds, but local government debt is objective existence in the actual life. From the reality of local government debt situation, the prominent characteristic performance is big for the debt scale, new debt increased year by year, the debt management to be chaotic and the debt form diversification. In 1990, the fiscal gap of local government was 13.444 billion yuan ; It inreased to 396.059 billion yuan in 2000;At the end of 2009 ,the local government debt up to about 7.38 trillion yuan, of which about 3.05 trillion yuan was the new debt in 2009. Not only that,the country has not carried on to the local government debt macroscopic grasps, local governments are borrowing in their own way.As the absence of laws supervision ,in the whole process of borrowing local government debt presents the characteristics of arbitrariness and debt form diversification. Its management is rather chaotic. In many of our local government debts,there are the debts that the local government assumed full repayment of responsibility, and the debts that the local government shall be jointly and severally liable for, as well as the debts which the local government should undertake security liability that is base on social welfare and social stability. The immediate cause of debt produce is nothing more than make ends meet. According to the actual situation of local finance, the main resons of local government debt to be more and more are shown as: Our current tax system makes our country's financial paying responsibility and fiscal revenue in between the central and local divides, so that the state revenue will be concentrated to the central power mostly, while 80% spending responsbility will be allocated to the local govemment.Moreover the state hopes to achieve balance at all levels for finance through financial transfer payment, in order to achieve the central government to the local financial control. However, as the situation of our country is complex and relative legal system is not perfect, local government revenue can't satisfy the requirements of local financial expenditure, while financial transfer payment system in practice effects small.All of these lead to local government conform with property serious imbalance,so that the local government have to borrow to live. Local officials'achievements impulse makes the already struggling local governments more difficult. Meanwhile, the financial supervisory system of local government is not perfect which provides a broad space for local government debt lavished. Thus, the local governments of China appear the current debt flood situation.In view of this, drawing on the successful experience of foreign countries,the author puts forward the following measures to regulate local government debt in China: first, the relationship between central and local governents should accelerate the legalization, and expenditure responsibility of the local government should be clear in the form of law as well as delimit the corresponding property to local government. Second, in order to achieve the Government's fiscal transfer payment of legalization and standardization.,we should to strengthen our financial system's legal construction, to improve the transfer payment system and its supporting systems.Third, we should accelerate the transformation of government functions to reduce local government debt. Fourth, we should establish financial supervision system to strengthen financial supervisionthe. Fifth, according to the concept of democracy and constitutional government,as well as the international trend,we should empower local governments and certain tax bonds legislative power to expansion of local revenues. Finally, we should establish a correct view of performance and set a reasonable official assessing system.