A Research For Issue Management Of Local Government Bond

In recent years, as China's industrialization and urbanization process accelerated, the demand for local public investment grows rapidly. Although our law does not allow local government budget deficits and provide security, however, in a tension situation for the local financial revenue and expenditure, a large number of non-standard behavior and implicit government debt liabilities emerged. These government behaviors hindered the healthy economic development, and thereby, local government must find a suitable solution for financing and debt management. In 2009, the issue of local government bonds gave the above problems a possible solution. With the issue of local government bonds into implementation phase, the phenomenon of "break issue" and "thinly traded" showed up on more than just one local government bonds on the first day. What's more, some of the funds fail to focus on the implementation of new central government investment projects, resulting in the problem of low efficiency in matching the finds with the central part of the investment supporting. Therefore, the research for the current local government bond issuance and, management is very important.In this paper, results of previous studies on the systematic analysis based on the concepts of local government bonds and basic theory are summarized, and a deep research on United States, Japan LRG financing model were compared as well. Drawing on successful experiences of these countries against the background of local bond issuance, timing, status and problems of analysis, a suggestion is made that a complete system of local government bonds policy can be refined by clear guidelines, improvements of institutional frameworks and the strengthening of risk management, which will somehow give a theoretical guidance for the management of local bond issuance.