The Study Based On The Government Credit Of Chinese Small Cities Construction Financing Pattern Innovation

This thesis will undertake the systematic thinking of financing modes with small towns as its carrier, pointing to the financing difficulties in small town construction and trying to do creative work in small town construction financing modes on a basis of governmental credit. This is the main contents of this thesis.In China, "the issues of agriculture, countryside and farmers" has always been a hot issue disturbing China's construction, reform, development and stability. Why this issue can not be satisfactorily settled lies in the deviation of the guiding ideology, that is to say, limiting "the issues of agriculture, countryside and farmers" to itself. The 16th Party Congress Report concludes positive and negative experience and explicitly points out that extension of county economy is the necessary request and significant contents of planning urban economic and social development, establishing modern agriculture, developing countryside economy and increasmg farmers' income. This is a breaking wording and has special meaning to settling China's "the issues of countryside, agriculture and farmers" fundamentally. Small towns are the links and junctions of urban and rural economies, and therefore are the important parts in planning urban and rural economic and social development. We should be aware that small towns have the incomparable advantages in developing county economy. They play a very important role in breaking the dual structure in urban and rural economy, cultivating the uniform urban and rural commodities and factors, integrating all kinds of urban and rural resources and realizing optimization of their allocation. Small town development is the significant support to county economic development in the new stage.Finance is the core of modern economy. Difficulties in county economic development are actually a kind of credit difficulties. To further discuss China's small town construction financing, we can not limit "finance" to "finance", or limit "financing" to "financing". On the basis governmental credit, credit establishing is promoted by financing. The government can organize credit promotion to perfect the credit structure of small town construction projects by promoting credit establishment. The financing modes innovation of small town construction is the inevitable choice of settling China's small town construction financing.This thesis first emphasizes that creative thinking will be made of small town construction financing modes on the basis of governmental credit. The relation of small town construction and national economy is analyzed as well as government's role in small town construction financing. After this, the conclusion of government's dominance is drawn and the efficacy of government is evaluated during the urbanization process. Then according to collected information, the present status andcharacteristics of China' s small town is reviewed in a synthetic way, it isthought that the relative insufficiency of input, lack of funds, is the direct factor limiting China's small town construction nowadays at the first place. Therefore, we must update the investment ideas of small town construction, reform investment and financing system, establish diversified financing system and open up new channels of funds sources. This is the theoretic elicitation to proper recognize the various properties of small town construction projects as well as the realistic demand of speeding up small town construction and promoting small town synthetic competitiveness.Then, the author compares the small town construction financing modes at home and abroad, and expects to extract the prime from theexisting successful experience and get some inspiration. Through comparison of financing modes and means in USA, Japan and etc., we think that it is not suitable to choose Japanese or American patterns in a simple way. This lies in not only differences of properties of micro-principals, economic and social systems, and the natures of major construction projects in different historical stages, but also that the vicissitudes of financing systems is a process of historic succession, gradual development and transition to the mode object. It is because that the logic start of financing modes establishment is that which modes are chosen as major ones among various financing modes depend on the integration of the complicated factors such as social and economic systems, economic operation mechanism, economic growth modes, structures of ownership and market development conditions etc. However, this does not mean that the international financing modes have no use for reference to China. In establishing China's small town financing modes, we must simultaneously take historical, realistic and future prospects, find a foothold in China's actualities, and use foreign experience for reference and develop it. As the recent transition modes, we may take the bank financing mode as the major, but at the same time implement system innovation and establish the micro-principals of financing modes under market economy. Based on this with the perfection and maturity of market economy system, the future object modes are attained step by step. That is to give play to the two basic principals (government and private) in small town construction financing and realize diversified financing modes in China's small town construction.Based on efficiency, the author proposes innovation directions of small town financing modes: object mode and transition mode. The aim of China's economy system reform is to establish socialist marketeconomy system, which shall conform to the development trend of the world market economy and make connection with the world economy. Whatever financing mode, always varying, shall not be the object mode choice of China's small town construction financing. The object mode of small town construction financing shall be the integrated mode of the market competition-guiding financing mode and government-guiding financing mode with Chinese characteristics instead of copying certain financing modes. Besides, we think that in a rather long period the innovation in China's small town construction financing field must be in a step-by-step way. It is necessary, during the process, to make full integration of governmental superiority and market power to form a financing mode in accordance with China's economic development status. Speaking from this aspect, the transition mode shall take bank's direct supervision as primary and capital market supervision as secondary, which shall integrate with each other and develop together. We shall try to realize full combination of governmental superiority and market power and make it approach marketization step by step. For the benefit of correct direction, we analyze the resources from government and market available to small town construction financing, and put up the basic route of financing mode innovation of changing investment principle and re-position government's function. With the financing efficiency analysis and the innovation direction as well as route choice, we put up two propositions: risk-return corresponding infrastructure financing; and corporate financing on the basis of governmental credit.Through systematic analysis we propose the GPF innovation mode of small town construction financing. A detailed discussion will be made of the basic clue of the GPF mode. Theoretically, the GPF mode has three important factors: a) the symmetrical risk-return mechanism; b) thegoverning structure of investment principal self-efficiency; and c) the cash flow formation of the financing project. Analysis of the three factors can further perfect the GPF mode. Speaking from financial environment, financial suppression is the factor influencing the GPF financing mode efficiency, and financial deepening can be the significant means of environment optimization. Comparing with the current financing modes, their differences mainly reflect in: (1) Government shall not be the investment principal, and there is no direct link between project investment and financing and governmental liabilities. (2) Combine investment and financing with project property rights and benefits. Explicit property rights and obligations will make the benefits of the investment principal and the investor tend to consistency, thereby promote efficient operation and management after completion of the infrastructure project and maximize the project profits, and consequently increase its appeal to the investors, be in favor of attracting various types of funds and broaden financing channels. (3) Comply with the principle of risk-return equivalence and make for the efficient diversification of various types of risks. In this mode all concerning participants can cautiously identify and analyze various types of risks, and make independent decisions and take profits and risks according to their risk-return bearing capabilities in the market way. Realization of risk-return equivalence can overcome the phenomena that in the current mode the government will take all risks or all risks will be transferred to certain market participant in case of government's moral hazards, and lower the financing risks in the town infrastructure project in an efficient way. At the same time, the GPF mode can evolve and develop continually by itself. Its implementation will make for the realization of the small town infrastructure financing innovation direction, help the market reformof the current town infrastructure construction investment and financing system, and provide facilities for the adoption of novel financing modes and channels.On the basis of the past research results and the comprehensive survey of many counties, the local government liability risk discriminant model and the local governmental credit evaluation system will be established separately from the two aspects of liability and credit through empirical analysis.Empirical study will be made of small town government liabilities for settling practical problems. Alarm condition indicators and warn indicators are designed according to macro-prewarning logic. On the basis of the past research results and the comprehensive survey of many counties, the local government liability risk will be reflected by use of the two levels of indicator systems through empirical analysis and the 40 counties of Hunan province are classified. The liability risk classification and six main factors are attained for some counties of Hunan province by means of the main component analysis method, and the local government liability risk discriminant model and the logistic regression model are established. We expound the modeling process of the two methods and their deviation rates and then attain the prewarning section.Governmental credit is the main component of financing mode innovation. Building and promotion of governmental credit is the necessity of guaranteeing small town favoring construction as well as the basic requirements of financing mode innovation for government. As the organic components of national regime, local governmental credit constitutes and reflects national credit. Under current conditions, for the small town construction financing innovation it is an urgent affair to strengthen study of local governmental credit, carry out evaluation oflocal governmental credit within a scientific, objective and just evaluation system, and further take effective measures to improve and promote governmental credit. On the basis of elaboration of concerning theories and evaluating methods, the local governmental credit evaluation system is established with reference to the mature practices both at home and abroad. Shaodong county of Hunan province is taken as the object of empirical study, the credit status of which is evaluated. The conclusion drawn proves that the established evaluation system complies with the reality.Through the deep elaboration of small town construction financing mode innovation, a series of propositions are put up aiming at promoting small town financing capability practically at last: (1) Improving the finance credit system is proposed due to the incompletion of the property rights reform, credit principal deficiency and governmental administrative power excess extension. Hence the improvement of finance credit system will provide effective assessment tools for governmental credit that plays a fundamental role in small town construction financing. (2) The idea of small town public finance has certain theoretical meanings, which is put up on the basis of further reform of China's political system. It requests further pushing forward property rights reform, further clarifying governmental functions, more citizens' participation in and supervision of small town construction, and more supervision channels of small town construction funds. Only by this can the sources and usages of small town construction funds be clearer. (3) The key point of non-productive town infrastructure financing difficulty lies in that it usually does not have expectable positive cash flow. Hence, one of the solutions to it is to set down a shadow charge structure, make financial instruments feasible and operate financing. As to the non-productive town infrastructure whoseservice quantity is measurable, its shadow charge structure shall be set down in association with its service quantity. However, for those non-productive town infrastructures whose service quantities are difficult to measure, substitute indicators can be chosen to determine their shadow charge structure.