Chengdu City Investment Group's Investment And Financing Issues Discussed

With the rapid urbanization process of our country, it is more and more important to improve the city infrastructures for better living conditions, attract more industrial groups and promote the development of the urban economy. In order to solve the problem of the insufficient fund on urban infrastructure construction, the local government sets up the state-owned enterprises or groups through the ways of capital investment, land allocation, stock oblige transformation and stipulated fees, which could be regarded as the local investment financing platforms. With the aid of these platforms, the local authority could invest in the field of municipal infrastructure construction together with other public utilities through external financing. After the global financial crisis, the local investment financing platforms have played active roles in urban construction and dealing with the financing crisis. However in the meanwhile, with the accelerated development of local investment financing platform, there are also various deficiencies on its system, administration together with some liability risk, especially after the background of reinforcement on risk assessment and standardized administration of investment financing from the central government, the reconsideration on the orientation and operational mode of the local authorities'investment financing turns to be more necessary and urgent.This essay first of all explains the background on the selection of this topic, summarizing the current domestic and oversea research status, states the research method, ideas and outline of this essay. Then it sets forth the relative theories on urban infrastructure construction, and explains the concepts of urban infrastructure construction, theories on public good, marketing assessment of urban infrastructure construction and item discrimination. Thereinto, the author has put more emphasis on the application analysis on the item discrimination. On the basis of theory introduction, this essay has reviewed the development process of China's investment financing platform and analyzed the current status as well as the problems of this platform. It has also introduced the operational modes of some big city investment companies of our country as the reference for Chengdu City Investment Group. The next part of the essay is mainly focuses on the Chengdu City Investment Group, introduces its current situation, and analyzes its main deficiencies and restriction factors on the basis of its achievement. For its deficiencies and restriction factors, the author mainly states the following two aspects:1. Interior problems occur, which are the simplification of financing channel, simplification of return funds, relatively low profit, relatively high risk on middle and long term investment, high reliability on the local government, weakness on project decision-making and so on; 2. Problems brought from the external environment such as excessive competitors, national macro-control policies and authority integrity. On the analysis of these problems, the author puts forward his suggestions on the improvement of investment financing mode of city investment groups, which is through the sortation of its own management items, the city investment groups make the best use of their current financing resources, actively innovates its financing mode, widens its financing channels, reinforces the risk assessment and management, and to ensure its sustainable development. The last part summarizes the whole essay and from the point of the agency agreement relationship of enterprises with government, brings forward the role of government on the development of investment financing platform is reigning but offside. At last, the author states the next step on his research.The main contribution of this essay is to analyze, discuss and set forward some suggestions on the operational mode of government investment financing platform from the micro point view. However, due to the knowledge deficiencies, the restriction on research view and insufficient data, some parts of the research in this essay may be superficial. Some suggestions for Chengdu City Investment Groups may be not so mature or a bit difficult to be implemented. There may be also some inadequate aspects during the course of research. Chengdu City Investment Groups, as a result of system reformation of investment financing, the numerous problems it facing and its development are both the new topics for research. These various problems such as using new type of financing tools to invest foreign capitals, how to get more policy support from the authorities have not been fully covered by this essay which may be result in the incompletion of this research.