The Research On The Debt Financing Mechanism Of Chinese Local Government In New Times

According to the 1994 "Budget Law" the twenty-eighth states that "local budgets in accordance with living within our means, the principle of balance of payments compiled not contain deficit. Besides the law and the State Council have the stipulation in addition, local governments may not issue local government bonds. "In 2008 in response to financial crisis, China's macroeconomic policies clearly announced transition to appropriate monetary policy and active fiscal policy, and 4 trillion RMB investment plan to match November allow the Chinese State Council approved the local government borrowing. But the strict sense of the local government bond market (corresponding to U.S. municipal bonds) is not introduced, only as the name of local government debt issued by the Central on behalf of the lending to local governments, but also by the Ministry of Finance on behalf of the then central and local government settlement net.This paper through the empirical analysis and normative analysis of the basic principles of economics, the use of government on how to regulate local government debt financing mechanisms, targeted and feasibility of proposed policy recommendations, for the better provision of public goods and services, and hope to have a certain theoretical and practical significance.This sub-5 started. The first chapter is a basic introduction to the local government debt, which leads to a general basis for local government borrowing, this part is key. The second chapter contrast the operation of Local Government practice of borrowing to the United States and Japan for example, local government debt financing summarized some enlightenment. The third chapter describes the development of local government borrowing whole story, and form. The fourth chapter Local Government in China since 2008, since the debt situation and financing difficulties, including debt background, causes, content, features and management of risk. Chapter V proposes to establish a standard mechanism for local government debt financing suggestions, the focus of this chapter is the full text.