Study On China's Local Government Financing Platform For Risk Prevention

As early as 90 years in the 20th century, financing of local government began to show a prototype platform. Later, as urbanization, industrialization, speed up the process, local governments have accelerated the development of the local economy needs. However, since the tax system reform, because of financial authority and powers of local governments does not match the serious, leading to local government revenue and expenditure gap is growing. As a result, for the purposes of local government, increase the intensity of investment in urban infrastructure construction means to break through the bottlenecks of the shortage of local funds available funds and national legal obstacles. In reality, under the pressure, local governments have to seek new financing way, local government finance platform thus came into being. Especially since the fourth quarter of 2008, in order to cope with the international financial crisis and prevent the economic downturn.the central authorities issued a series of documents in support of "conditional form of local government investment and financing platform". in support of national policy, China's platform for local government financing have mushroomed in large numbers.Combined with the reality of our situation, the emergence and development of local government financing platform for China's economic operation has positive and negative effects. From a positive sense, It contributes to China's economic recovery and has made great contributions to local economic development, it is worthy of recognition. But at the same time, local government financing platform for the rapid development has also brought many negative effects, especially in recent years, as the number of local government financing platform for rapid expansion, platform of liabilities expanded substantially, nonstandard platform is ubiquitous, potential financial risks and financial risks are also becoming increasingly prominent. Based on these concerns, risks in local financing platform has become a matter of domestic concern of the scholars.In this article, the local government financing platform for the data and facts on the basis of case analysis, using public economics theory and risk theory to illustrate the theoretical basis for local government borrowing, and introduce a combination of qualitative and quantitative analysis method to comprehensive understanding of the development situation of local financing platform, In-depth analysis of current situation of platform companies exist under various risks. Finally, from the introduction of investment and financing system, strengthening of local government debt management, strengthening financial supervision, innovative financing models and other aspects of the local government raised the starting place to prevent and resolve behind the investment and financing platform for rapid development of the potential risks of the proposals and measures, to seek solutions to the local government's long-term financing solution.