Study On The Risk Management In Government's Foreign Loans Of Chongqing City

Foreign loans are repayment of external loans, which is authorized by the State Council to representatives of the borrowing countries to national credit guarantee repayment. Chongqing city government's foreign loans play an important role to support local infrastructure, basic industries, transport, construction of environmental protection, health, rural water, drainage and so on. But with the deepening of China's reform, opening up and economic globalization process accelerated, local government's foreign loans risk is also growing. Scientific analysis of the potential risk factors, enhancing foreign loans risk management has great significance.Currently, more than 30 provinces and municipalities in the country's autonomous regional projects government's foreign loans swaps hedge against inflation, Chongqing is in a leading position. Chongqing proceeding to the foreign loans risk in a proactive, positive and dynamic risk management is based on the total size of the external debt continued to rise in recent years, growing foreign loans security management are highly valued.Through the establishment of evaluation index system, using principal components analysis of 40 districts and counties of Chongqing city (42 districts and counties of Chongqing administration, as a high-tech zones in the capital and sufficient funding and policy differences, we are not considering the scope of foreign loans, no evaluation of it) the main debt risk to the empirical analysis and evaluation. Overall, the implementation of foreign loans in Chongqing project risk center. This paper analyses Chongqing city's foreign loans risk in the various aspects: from the scale of risk, Chongqing's foreign loans are far from risk areas; from the structural risk, Chongqing in the currency sovereign debt structure and the interest rate structure is in substantial risk, currency yen and the dollar are in a most, which floating rate debt of the relatively large; from a cost risk, the Chongqing city government's foreign loans has become expensive capital from cheap capital, increasing the cost of government debt risks; from a business risk, Chongqing city government's foreign loans operating efficiency is also not satisfactory; the major market risks, including interest rate risk and exchange rate risk, Chongqing city's foreign loans has experienced a lot of exchange rate risk, and they are facing even greater market risks.Of course, the results of Chongqing city government's foreign loans risk management are obvious to all. Now, the government of Chongqing preserve and increase the foreign loans swap a total of more than 80 projects, the agreement more than 20 billion dollars, most of them in yen, about 120 billion yen, within a certain scope of the Chongqing city yen revaluation of the yen debt facing the risk of locking in future due to the repayment of debt. This paper gives a detailed exposition for the successful experience of Chongqing city foreign loans swap preserving and increasing.Facing Chongqing city government's reality issues, opportunities and challenge about the foreign loans, this paper raise some proposed measures from the policy system, and restraint mechanism, rules and regulations, project monitoring, risk assessment, financing and construction and so on.