The Local Governmental Debt Management Of China: Financing Model, Risk Control And Information Disclosure

With china’s comprehensive national strength booming rapidly, the enterprise investment has achieved excellent results. Due to the needs of developing, the local government has financed in a variety of ways, but to some extent, the huge investment puts huge pressure on financing ability.The public sector mainly uses BT in debt financing, due to the high cost of financing, the possibility of governmental long-term stability is becoming lower and lower. In response to the growing local governmental debt make construction of responsible government, service government, no-corrupted government and the government under the rule of law, the PPP mode arises to rationalize local government’s financing model. This contributes to development of government public service, and the overall management level. At the same time, local government is suppose to control financing risk and disclose the debt information financing model appropriately. Thus, the local government could make the specification for debt and combine with ideas of "open front door, block the back door and build wall", based on which, the local government can solve the problems of how to borrow, manage and repay debt, in order to strengthen the management, explore effective way of financing and reduce the risk of financing to keep sustainable development stable. The system of local governmental debt financing will be improved in turn and the risk will be controlled with the supervision of the whole society. Firstly, the thesis introduces local governmental debt risk and financing model based on accrual government accounting, and meanwhile, defines local government debt management. The thesis also introduces PPP model based on risk management, internal control and information disclosure in order to make the managing mechanism of controlling debt risk better. Secondly, the thesis makes identification of related risk and the causes based on different kinds of debt. Last but not least, the thesis introduce the foreign experience of governmental debt management, and puts forward measures to establish the mechanism of risk control based on financing model, risk control and information disclosure. The thesis includes eight parts:The first part is introduction, which mainly introduces the research background and selected topic significance based on theoretical value and application value. Then the thesis introduces the content, methods, innovation and limit.The second part is the related research was reviewed. Research reviewed mainly from four aspects related research status at home and abroad are introduced, including local government debt and risk management research review, the local government debt financing model research review, risk control research of government and government financial information disclosure are reviewed in this paper, the four most among them in every aspect to evaluate more systemic research status.The third part is the theoretical basis of local government debt risk management. This part firstly introduces the theoretical basis of local government debt risk, mainly from the multiple perspective of local government debt risk, finance main body, the structure size, use target and financing platform, etc. Secondly, this part introduces the basic theory of local government debt financing mode, mainly from the overview, the PPP model and characteristics, the adaptability of the PPP financing model and its advantages, the PPP financing model of risk strategies and income security, etc. Again, this part of the theoretical basis of local government debt risk control is analyzed, mainly including debt risk assessment and control measures, the debt risk supervision and management. Next, the part of the theoretical basis of government financial information disclosure, mainly from the concept of accrual basis government accounting and budget accounting, government accounting objectives and characteristics, the government accounting confirmation basis and principle, etc. Finally, this part explores the model of local government debt financing, risk control and the relations between and among information disclosure.The fourth part is the local government debt financing status and analysis. This part firstly shows the present situation of the local government debt financing mode and type were analyzed, and introduces the types and features of the debt. Then, based on local government debt financing model perspective will confirm to four categories, namely direct dominant liabilities, direct implicit liabilities, contingent explicit liabilities and contingent implicit liabilities. Finally, the part of local government debt in the process of recognition and classification analysis related problems, mainly including class boundary is not clear, financing platform is not standard, it is difficult to identify risk and information disclosure is inappropriate.The fifth part is the local government debt financing risk assessment and its reason analysis. The part of the risk assessment is mainly in our province data, for example, on the basis of overall risk assessment, directly under each category in the fourth part explicit debt risk, or has a dominant recessive debt liabilities risk and contingent risk assessment. Then, the part is based on risk assessment results to analyze the causes of financing risks, due to debt business is not sound, the governance and spending budget responsibility does not match, imperfect financing system, financing decision system is unreasonable and debt accounting information is not scientific.The sixth is divided into local government debt risk management international reference. This part is mainly in the United States and Australia, local government debt, for example. On the one hand, this part analyzed the basic characteristics of American municipal bond market; this paper introduces the relevant system design, and expounds its significance. On the other hand, this part analyzes the Australian local government debt risk management framework, examination and approval, analysis and reporting process.The seventh part is to perfect the internal control under the perspective of local government debt risk control mechanism. This part is mainly from establishing the modern budget management system, the construction of local government debt in our country the PPP financing model platform, improve the classification system of local government debt risk, the local government debt risk measurement methods and the establishment of local government debt risk early warning mechanism five aspects of mechanism design.The eighth part would set up right and implement the system of local government debt information disclosure. This part mainly from perfecting the information disclosure system of local government debt, the establishment of local government debt accounting mechanism and recommend the government accounting reform and the government is responsible for the formulation of assets in three aspects.Based on the theory of local government debt management, this dissertation is concentrated on local government debt risk control from three aspects such as financing, risk control and information disclosure, in order to put forward the innovation of this article from the theory and system construction ideas.Firstly, it is concentrated into the local government debt management from the concept of risk management. From the Angle of risk management, the research is about how to manage local government debt, with financing model as the basis of risk analysis, in the use of government internal control from the business process of local government debt management to evaluate related risks and controls, and make accrual basis government accounting reform as a breakthrough point put forward the optimization scheme of information disclosure system. The dissertation is discussed theoretically in local government debt management framework, financing, risk control and the internal relations between information disclosure of definition, and put forward the corresponding strengthening on the basic theory of local government debt risk management.Secondly,it is the starting point of local government debt management as financing model. As a starting point with with local government debt financing mode, through the scientific system of debt classification system, this dissertation has illustrated the financing model as the rationality of local government debt type classification, combined with the analysis of the characteristics of the different local government debt. Then the dissertation has cleared present situation of local government debt in general, summed up in the management process may lead to the lack of risk, and present the PPP financing model scheme.Thirdly,from the Angle of government internal control, the research is about how to make local government debt management and risk control. The dissertation is considered internal control as the main control mechanism of government, combing the local government debt in China from the perspective of risk management in the process of decision-making, execution and supervision comprehensively and systematically. Then through the whole business process of carding and reengineering, the research focus on the debt of the different financing modes risk identification and evaluation, and analyzes the reasons, to manage and control of local government debt through the establishment of internal control mechanisms.Finally, the debt information disclosure system of accrual accounting is introduced into the local government debt management. These researches is regarding government accounting reform as the basis of the design of the information disclosure system based on establishing a modern government in the budget management system, and propose local government debt accounting on accrual basis government accounting principle. The research make clear the financing model and risk control mechanism, as a result that government accounting basis and methods for government debt information generated and disclosure system optimize design the specific direction and research goal.The limitation of the research is as follow. At present, it is much weak for Chinese local government debt scale screening, statistical analysis and calculation, as this kind of information is so sensitive, even more with the asymmetric information of the central government and local governments. Therefore, there are many deficiencies in the research on local government debt scale.