Study Of The Local Bond System

In China, local governments are facing the heavy pressure of fiscal expenditure because it undertakes vast functions of resources allocation. Searching for the financing resources of local governments comes to be an important issue when local fiscal revenue and transfer payment is limited. As a normative financing way, local government bond has gone through long-term's practical examination in those countries that have relatively perfect tax-sharing system. Because of the advantages of it, such as: primarily being used to local infrastructure, the more flexible operation, the better reputation and the lower financing cost, etc, it has been used as an important financing tool in developed countries. Now the conditions of local government bond issuance have been provided with in China. Endowing with the bond issuance right to local governments will availably remedy the local public finance gap and foster local economic development. On the other hand, it is essential to promote financial market development in China.This thesis is divided into four parts:In the first part, the principle theory of local bond is discussed. Above all, local bond is defined, including the concept, character, and function. Then, the warrant of issuing local bonds is explained in theory.In the second part, the international experience will be employed. The practices of the United States, Japan and France are introduced at length. And on the basis of analyses and comparison, the revelation to China's local government bond issue is provided with.In the third part, the necessities and the feasibilities of establishing China local bond system are discussed respectively.In the fourth part, the advices of local government bond system design are given. It includes the general consideration, the principles of issuing, the designing of the system and the related conditions of the system.