China's Financial Or Debt Risk Analysis And Countermeasures

Financial contingent liabilities' risk is one of financial core liabilities' risk. Chinese current system is a larger interest of the adjustment process. Financial contingent liabilities will enhance the financial risk when the government is not rich. Financial contingent liabilities can't be reflected in the budget system, which will seriously affect the country's macro-control effects on the economy. The liability is accumulating and lacking of management, which leads financial risk full of uncertainty and concealment. This instance has resulted in the financial contingent liabilities' risk is difficult and hard to grasp, so as to form a potential threat for the financial stability of operation and the sustainable economic development. In the economic situation under better circumstances, the risk could still be temporarily hidden. If economy goes to bed, the risk will burst out and create more pressure and load for finance. Therefore, it is of great significance to guard against and defuse financial contingent liabilities' risk.In the course of the study, I analyze the special causes and characters of Chinese contingent liabilities' risk, when its economy is in transformation process. Then I put forward the prevention and control to reduce Chinese major financial contingent liabilities' risk. The main contents as follows:The first section mainly describes the background and significance of the topic, and then roundly analyzes the domestic and foreign scholars on the research, which makes the necessary groundwork for latter research.The second section draws the definition of the concept of financial risk. Through analysis of financial risk matrix, I summarize the definition of financial contingent liabilities' risk. Contingent debt is the result of the government's intervention in the market. Financial contingent liabilities' risk occurs within the financial system's formation, which may have both positive and negative impacts on the operation of the economy. On one hand, the government can control contingent liabilities to achieve political goals and cause economic functioning healthily. On the other hand, contingent liabilities expand the financial uncertainty and affect the financial capacity for sustainable development, which will increase the financial pressure on the central government.The third section introduces the major types of Chinese contingent liabilities, and then calculates each size of contingent liabilities. Our liability is significantly higher than other developing countries. Therefore, we have obligations to the financial risks and hazards those may be awakening. Second, the article describes because the development of our country in the process of economic restructuring this particular historical period, our financial contingent liabilities' risk has many special causes and features. As the financial and banking system is not complete, our financial contingent liabilities' risk performs besides the uncertainty and metastasis nature of the transition is also shown.The fourth section indicates state banks' bad assets and local assure liabilities constitute the main body of Chinese contingent liabilities. Therefore, we should be focused on those liabilities in preventing and controlling the risks. The liabilities in existence should be resolved firstly and the increment of control should be strengthened secondly. The government should also establish an early warning and monitoring system. In order to reduce high contingent liabilities' risk, the central government should establish a rapid response mechanism and actively take steps to intervene. Moreover, the government should establish a legal framework to deal with contingent liabilities' risk so that the central and local expenses in the division to be more precise legal norms.