On Issuance Of Local Government Bonds In China

Corresponding to the national bonds, the local government bond is defined as an important part of the government bond system. Though the financial system is different in the foreign countries, the local government bonds have long development history and take a great place in the financial system in most countries, such as Japan, France and United States.Chinese regulates that the local government doesn't have right to borrow any local debt except having the privilege of special law or having the authority of the State Council. After Chinese reforming tax system in 1994, though the local finance income's proportion in the nation financial revenue drops continuously, the local government has more governance liability and needs more fund than before. As a result, the local government has adopted all kinds of way to get fund to settle finance unmet problem though law prohibit it to issue bond, such as issuing fund in the name of other company and so on.Though there are so many problems in the process of issuing local government bond, the practice of western countries proves that there are more advantages than shortcoming. The local government will strengthen his ability of raising fund and settle the problem of insufficient development fund through issuing local government bond. On the basis of efficient supervised system, issuing local government bond will help local government to place financing and to manage the government debt and so on.Today, the condition of issuing local government bond has matured in the process of China establishing the socialist market economy system. So establishing the system of issuing local government bond to standard the management of local bond is urgent. On the basis of local bond's theory and Western countries'experience, the thesis analyzes the necessity and the feasibility, explores the concrete system of issuing local bond, and raises the countermeasure to eliminate negative influence.