County Government Or Liabilities Ability To Repay Analysis

The local liability are complicated in China, and many of that become recessive burden. Some experts reckoned the risk of some local liability exceeds that of finance, becoming the major threat to our economic security and social stability. There is essential difference between contingent liability and any other liability. The contingent liability are produced by long-term accumulative conflict of financial system, which is difficult to measure, foresee. Without proper management, the contingent liability will easily provoke financial crisis and economic fluctuation, even endangers the political stability.The paper will explore the concept of government contingent liability to analyze the categories, characteristics and causes of the liability. The paper will comment and conclude the contingent liability based on the analysis of the causes of contingent liability, its effects and repayment channels and literature review of international experiences. The paper will analyze the repayment capacity of Wu Hua District of Kunming, and bring forward suggestions from the perspective of macro management mechanism, government contingent liability management system and local government investment management model based on the research.Based on the analysis of the contingent liability situation of the district, the author will come up and define expenditure contingent liability and income contingent liability, and use local finance availability indicators to replace local finance income indicators, which is more accurate. Moreover, through analyzing the repayment capacity of local contingent reliability, the paper will formulate an analysis model of local contingent reliability. The paper will forecast utmost repayment capacity of contingent reliability of Wu Hua District of Kunming from 2007 to 2010.