Current Research Of Local Government Debt Risk In China

In recent years, debt problems in local governments of our country have began to emerge and spread, even some of which at grassroots level cannot make their ends meet,bringing the finance to the verge of bankruptcy. Under such sever circumstances, attentions have been attached to both researches and effective management at decision-making, executive and academic levels. Theoretically speaking, debt risks in the local government in our country bear on issues of finance, fiscal systems and government management, which are gaining recognitions but still have not yet been theorized and systematized into guiding policy making and practicing. Based on reasons above, the paper aims at doing researches on debt risks in local government. By quoting the definitions, analysing the causes of formation, illustrating the harms, and also by introducing examples on debt management and experience in western countries, the author finally come up to new policies and measures for guarding against and defusing debt risks both in essences and from outer envrionment. On the basis of government management and operations, policies and measures are made to connect markets with different local governments, short term measures are like unifying the statistic standards in local governments, centralizing different debt management departments, setting up new systems in defusing debts and advancing sustainable development. Long term measures are like building orderly and well regulated local government debt markets, improving government functions of market supervision and risk control, identifying rationally the boundaries between governments and markets, simplifying government structures, optimizing fiscal management system, consummating performance evaluation system, building debt warning mechanism and etc. The paper focuses on the combination between theories and government management practices,bond issuance, short and long term measures on debt managements.