Studies Of Local Government Bonds

The issuing of local government bonds in China has been a lot topic since the tax sharing system was reformed in 1994.It is necessary for the local government to issue bonds both form a theoretical and practical point of view, but the Central Government is very prudent about this thing, so the local government bonds has not been released. However, in the context of the financial crisis, the central authorities made the final decision to issue 200 billion of local government bonds on behalf of the local government to solve the difficult problems of being short of funds. The result was to bring local government bonds distributed throughout the country for the first time. As a new thing, there will be a series of problems and risks about local government bonds. The controlling and prevention of its problems and risks will have a direct impact on the effect of this issuing, and cause an important influence on its long-term release. This thesis mainly adopts the methods of empirical analysis and normative analysis with the combination of a comparative analysis as well as statistical analysis to study the issuing of current local government bonds in China. This thesis is based on the theory and practice of issuing local government bonds. From the characteristics and market performances of issuing of local government bonds this time, this author gives some advice in improving the issuing of local government bonds from the following four aspects: the establishment of the "trinity" regulation model; improving the mechanism of using funds; the establishment of risk-warning mechanism; the establishment of a debt service reserve fund mechanism. In order to realize that, we have to analyze it both from the market and the issuing systems to find the problems and risks in issuing the local government bonds this time combined with the international experience at the same time.