Research On Debt Risk Sharing Of Local Government Financing Platform

Local government financing platform is a kind of special purpose vehicle(SPV), is by the local government and its subordinate organizations through fiscal funds transfer land and transfer methods such as the establishment of state-owned enterprises, its main function is for the local government for financing, the funds raised(= which is mainly used in municipal infrastructure construction. But due to the municipal project is mostly a public welfare, profit ability is weak, the regulation of the local debt has been strengthened, the financing platform facing huge debt crisis. According to the national audit office on December 30, 2013 release of the national government debt audit results show that by the end of June 2013, local government financing platform as the main body, the local government in China’s largest debt up to 6.97 trillion, accounting for 37% of the total local government debt, and equivalent to 28% of GDP. Compared with the end of 2010, 4.9 trillion of debt, increased by nearly 70% to the deadline.PPP model is to provide public products and services, between the government and private enterprise based on the specific projects to form a cooperative financing mode. Partnership, benefit-sharing and risk-sharing is the 3 big features of the PPP mode. 18 the third plenary session proposed "allow social capital through franchise methods such as in urban infrastructure investment and operating system". In the current local fiscal capital insufficiency, the national regulation policy tightening, the introduction of social capital in the field of municipal infrastructure construction, helps to reduce the pressure of local government debt, to reduce and prevent the debt risk of local government financing platform is undoubtedly a good try.This paper will take the SASAC subordinate Kunming dianchi lake in Kunming, investment co., LTD. as the research object, by analyzing its financial status, management ability, solvency indicators, such as recognition of the company’s stock of debt risk and incremental debt risk, analysis its causes, and from the public-private cooperation method is adopted to improve the urban infrastructure construction perspective to analyze the PPP model in the local government financing platform the necessity and feasibility of implementation, and by combining the model to explore how to share the platform company’s debt risk and prevention, so as to draw inspiration and advice.Due to the introduction of PPP mode combining the debt risk of local government financing platform to prevent, in terms of theory, help to enrich China’s local government debt, local government financing platform, the contents of the researches, such as the PPP model. In practice, the transformation of local government function, perfecting the municipal infrastructure construction, promote the development of the non-public sector has important significance. On the one hand able to platform for companies and local governments to explore a new way to reduce the risk and risk prevention alleviate the pressure of the debt, increasing the service efficiency of funds. On the other hand is able to broaden the development path, folk capital to maximize the public interest better.