Local Government Debt Risk Early Warning System Study

During the transition period of China's local governments, economic and political decentralization of the system of centralized environment, the local government has become an independent economic interests and decentralized decision-making power of the main important. After the introduction of the reform of China's System of Tax Distribution, is obviously to strengthen and improve macro-control capacity of the central authorities at the same time, to varying degrees, all localities to increase the dependence on the central finance, the resulting plight of local government funding. As the market economy and deepen the transformation of government functions, local governments in order to readjust the economic structure, speeding up infrastructure construction, the use of various means of financing, through various channels to raise funds for construction, to a certain extent on strong impetus to local economic construction and social development of the cause. However, because the local governments lack the necessary legislative norms and effective supervision, the local government formed a long, the financing situation of disorder, the attendant is that local governments, covertly borrowing, dominant and recessive debt burden is becoming increasingly serious. As the local government financial distress, limited solvency, debt risks have become increasingly prominent, have produced many negative effects.Since the debt problem in China's local governments have been unable to avoid, but large-scale, has formed risks, and its concealment, better public face, be standardized, strengthen management. To guard against and defuse potential risks to ensure the smooth operation of economy and finance, local governments need to strengthen debt management, how early warning on the risk it is particularly urgent. In such circumstances, I choose the local government debt risk early warning system to study, hoping to contribute to the risk of early warning and to take corresponding countermeasures, defense, reducing risk.Review of the first chapter of the domestic and foreign debt in local government and its early warning of the risks of research results and inadequate. Chapter II First, from the debt burden and local government resources available to both local government debt risks defined, the local government stressed that the main dual identity as a public body and economic entities, different means of financing local government, the resulting debt risks Are also different. Then, from the decentralization of local government reform and competition, the administrative system defects, imperfect financial system, excessive market-oriented finance, debt management and a lack of standardized economic system restructuring and multi-level multi-angle, a comprehensive analysis of local government debt risk mechanism.Chapter III of the establishment of the local government debt risk assessment warning of theoretical framework. That the overall level of integration and project level debt risk early warning local governments build the basic framework for analysis of the local government debt risk early warning system meaning, early warning objectives, early warning procedures, early warning methods, and build a qualitative improvement of local government debt relative risk warning Index System.Chapter IV of Jiangsu Province as an example of local government debt risk simulation analysis. First of Jiangsu Province, local government debt and available resources of both flow of economic resources, economic resources or stock, can be seen in Jiangsu province can be used to resist the resources of local government debt risk is very tense. Rural tax and fee reform, standardizing the land transfer payment, social insurance funds to strengthen the supervision and management of local financing policy tightening, such as local government debt will undoubtedly aggravate the risk. Jiangsu Province, and then use the data from 2000 to 2004, in the qualitative indicators of early warning system based on the use of cluster analysis to establish practical and effective system of indicators, through factor analysis to identify early warning indicators of four public factor, which are narrow debt risks Factor, the deficit risk factor, or a risk factor and revenue structure risk factor. Thomson factor scoring method used by the public as well as risk factors critical value of the scoring, on the basis of this theory with neural network build local government debt risk early warning model, the 2005 Jiangsu Province, local government debt risk warning.Because the reasons for the current system, the power shortage, therefore, monitor and give early warning of the legal system and practice is still far failed to do, local government debt management awareness has not really established, the local government debt risk early warning can put the results in Implementation of defense, reducing the risk of debt must be related with the building of the system. To this end, the paper put forward a series of Chapter 5 of the proposed system the building. Including the establishment of local government debt risk early warning system organizations, local government debt risk early warning and regulations, establishment of local government debt risk information disclosure system, and actively establish and implement the sinking fund system, the establishment of local government debt risk early warning mechanism for handling results.