A Study Of Local Government Debt Management Issues

The debt crisis broken out in Europe and the United States reminds us that a comprehensive review of the national debt situation must be conducted to prevent the risk of debt in our own country. In fact, our debt situation is not optimistic. There exsits many problems especially in the local government debt management. The local government moderate debt can be an effective complement to the needs of public finances, promoting local economic development. However, because of the local government long-term debt in the disordered state, there accumulated a lot of problems, such as management tools to a single, debt-free section, the use of funds to waste, lack of supervision. These problems increase the risk of debt, the impact of the good operation of local government finances, and it is not conducive to the healthy development of the local economy and social stability. Under that situation, the study of local government debt is particularly urgent.This paper is mainly about the Chinese local government debt and its management. The text is divided into five parts. The first part is the introduction, including the research background, the significance of domestic and foreign debt management, the innovation and weakness of the local government research, and finally a brief introduction to the basic theory of local government debt management. The second part is about the local government debt management analysis. This section uses the latest local government debt statistics to analyze the scale of local government debt, including the debt types, debt using and debt situation. Based on these, the financial risk of the local government debt in China is pointed out. The third part describes the main problems of debt management. At present, the status of China’s debt management, legal lag, lack of specialized local government debt management law; decentralized management system, borrowing privileges are scattered with many institutions, lack of unified authority to conduct a comprehensive management of local government debt; poor management, the management means a single debt service reserve fund system, funds the operation and management system, risk early warning system for local system has not yet been established. The fourth part mainly analyzed the debt management problems of local government in China. From three aspects including the administrative system, the financial system and the government functions, the causes of local government debt are discussed. The fifth part is about how to improve the recommendations of the management system of local government debt. This section states the development of specialized laws for debt management, the empowerment of local government borrowing, the legitimate rights; the debt management mode, and how to set the management agencies; debt capital operation and management system, to improve the efficiency of the use of funds; debt risk warning mechanism to prevent the risk; the introduction of community supervision, to strengthen the debt and regulatory measures, to improve our local government debt management system.