A Study Of Debt Management Of Foreign Government Loans

During the more twenty years of reforming and opening up to the outside, China has actively utilized long term preferential loans provided by foreign governments to accelerate economic development. By now, China has utilized foreign government loans from twenty five countries and institutions, which to a great extent modifies the contradiction of short of construction funds and technologic equipments falling behind in its national economy and accelerates the development of a variety of industries. In China, foreign government loans have become an important part of foreign investments. However, until now there are still many unavoidable problems existing in utilizing foreign government loans, in which the debt problem is especially outstanding. In fact, debt management has become a core task in managing foreign government loans.This paper studies some issues of foreign government loans, which is based on their important status, function and action in national economy, especially the increasingly outstanding debt problems. Therefore, the main subject of this paper is to discuss the countermeasures and management of debt issues. This paper consists of four chapters as follows:The first chapter presents the concept of foreign government loans and discusses the historical and current conditions of our country's utilizing foreign government loans, pointing out the debt issues existing in it. After reviewing the internal and external research on foreign government loans, this chapter put forwards the research object of this paper and innovations in it. The second chapter makes a profound analysis of debt issues in utilizing foreign government loans. Since the repayment default in foreign government loans is a main reason resulting in debt issues, this chapter selects the angle of repayment default of borrowers (project units or the local), especially the moral risks caused by borrowers' unwilling to repay, using the method of game theory, to analyze the selected strategies of each principle institution and the mutual relationships of influence and limitation among them, from which to find out the source of restricting repayment of foreign government loans. This analysis provides significant and theoretical reference not only to project units and the local fiscal departments, but also to onlending institutions and the central ministry of finance. As the scale of foreign government loans keeps increasing, traditional lending management built on experience is hard to fulfill the objects of real-time supervising the scale of foreign government loans and scientifically and reasonably arranging the lending management. Therefore, it is necessary to build up a statistical debt supervising system of foreign government loans to supervise the projects of foreign government loans in each area. Based on the above thought, the third chapter builds up a debt supervising indicator system from three aspects of foreign government loans: basic conditions, utilizing conditions and repayment conditions. Then this chapter presents a modified efficacy coefficient method to appraise the effect of statistical supervision. The fourth chapter introduces the research outcome of our accomplishedprogram------the software achievement of statistical supervising system of foreign government loans, which will benefit the ministry of finance and other implementing institutions for macroscopically grasping the conditions of foreign government loans. Research on debt issues of foreign government loans has great theoretical and practical significance not only to macroscopic management of the ministry of finance, but also to internal management and latitudinal comparisons of each area.