Stduy On Performance Evaluation And Risk Prevention And Control For Local Government Financial Financing In The Urbanization Process

Local government debt or local government financing has long existed in China,but it did not receive extensive attention as a “problem” until 2008.To deal with the impact of international financial crisis on China's economy,our country issued a series of stimulus policies to promote economic stability and sustainable development.As a result,local government debt has expanded rapidly and extensively,giving rise to more management issues.This has caused the concern of the central government about the risk related to local government financing.Local government financing is like a double-edged sword.On the one hand,local governments can expand and accelerate the construction of local public projects through it to meet the needs for infrastructure and other public facilities in the process of urbanization,facilitating the inter-temporal sharing of the construction costs of suchprojects.Developed countries,such as the United States,allow local governments to hold creditor's rights;the new "Budget Law" that our country has implemented since 2015 allows provincial local governments to raise debts within a certain scope.These indicate the necessity and rationality of the proper scale of the local government financing.On the other hand,the local government financingcaused such problems as excessive debt burden,unreasonable structure of debt,non-standard management of debts and the opaque debt situation,which will lead to the accumulation of financial risks and finally cut into the national economy.The experience of developed countries like the United States shows that even if the local government is allowed to borrow,the country still needs to regulate,restrict and restrain by means of laws,regulations and administration.This research,conforming to the demands of the state to strengthen the management of local government financing,attempts to explore the phenomenon that the scale of local government financing is expanding in the process of urbanization.The exploration falls into four broad categories as follows.The first is to review and summarize the economic and institutional factors that affect the local government financing.The financial mode of local governments was constantly innovated,resulting in expanding debts.Especially after 2008,the debt caused by the local government financing showed a tendency of accelerated expansion.This paper analyzes the economic and institutional reasons behind this phenomenon.The second is to evaluate the influence of local government financing on economic and social development.This paper holds that,for the debt caused by local government financing,we should not only explore its internal circulation mechanism,but also grasp its influence on the growth of local economy,the rise of urbanization rate as well as the promotion of private investment.In this paper,Shanghai,Jiangsu and Zhejiang,all located in Yangtze River Delta,are selected as samples for empirical research on the above issues.The third is to evaluate the debt risk caused by local government financing.The risk originates from uncertainty.Based on the analysis of the fields and transmission channels related to the local government financing,this paper goes on to construct the condition for the sustainability of local government financing and,using KMV model,tests the degree of local government debt risk,again taking Shanghai,Jiangsu and Zhejiang as samples.The fourth is to explore ways to strengthen the management of local government financing model,and to prevent and control debt risk.In view of the problems found,this paper,following the principle of being scientific and reasonable,proposes a system for the management and risk control of the financial mode of local government in China.In this paper,the formation mechanism and the economic and social effects of local government financing in China are discussed from different perspectives,and the scale and risks of this financial mode are objectively evaluated.The measurement methods and the results of analysis are highly reliable.This article mainly explores the issues involved in local government financing.It systematically reveals the contradictions and sticking points in the financial management of local governments in China,discusses their root causes,and puts forward the ideas and countermeasures to address these issues.The research result can be used as a reference for the central and local authorities in charge.It is the basis of decision-making for the reform and institutional construction of local government financing in the process of urbanization.The data collected,the research methods adopted,and the conclusions drawn in this paper can serve as references for further researches in this field.