Credit Evaluation And Risk Management Of Local Government Investment And Financing Platform

China's revolution of investment financial system and revolution of dividing taxes is the reason of the local government investment and financing platforms'appearance. Moreover,the system of dividing taxes has been widely promoted,as a result of that it has lead the state revenue to the central government and widened the gap between the huge investment demands from local government and the limited collective financial income. In order to relieve this financial pressure, a new mode which is to build investment and financing platforms for urban construction to float loans with a repayment guarantee of future fiscal revenue has become a common practice for local government. However, in recent years, the local government investment and financing platforms have grown too rapid to accumulate huge risks. These risks have now become a new challenge for the security and stability of Chinese fiscal system and financial system.This paper expounds the content, features, background and present situation of the local government investment and financing platforms to build a solid theoretical basis for the research of the local government investment and financing platforms. On this basis, this paper provides a method of credit evaluation for the local government investment and financing platforms, and builds a credit evaluation index system and an assessment method. This paper uses factor analysis to analyze 18 government investment and financing platforms in different areas including Yangtze River Delta, Pearl River Delta, Bohai Sea Ring Area, the Northeast and Midwest. From the analysis, this paper studies the main factors which affect the credit of the local government investment and financing platforms. Finally, this paper provides systemic recommendations to control the risks from three levels involving local government, local government investment and financing platforms and commercial banks.