Study On Legal Issues Of Local Government Direct Financing In China

After the financial crisis, the local government is further concerned about the risk of financing platform. Currently the main mode of financing for local governments in China is loans and the local government financing platform is an important way to obtain loans. However, there are many problems in the establishment and management of the local government financing platform, increasing the financial risk of local government. In such as America, Australia, Japan and other countries, direct financing is an important way for local governments to access to finance, and the legal system of direct financing is relatively complete. In comparison, the legal system of local government direct financing is immature. Based on the study of theories and legal systems for government direct financing, this paper analyzes the direct financing status of local governments in China and the legal problems, contacts the successful experiences of foreign local government direct financing, constructs the legal system of local government direct financing in China. It tries to provide legal advices to expand financing channels, integrate into legitimate security funds and reduce the financial risk, and eventually to provide legal support to achieve the balance of the financing structure and maintain financial security.Addition to the introduction and conclusion, this includes the following four parts:The first part describes the direct financing of local government in general. This part is mainly necessary introduction and description for basic problems. On the base of the brief of the content and classification of local government financing, and on the standard of the legal relationship which produces, this paper classifies local government direct financing into two types, one produces property relations and the other produces debt relations, and discusses the theoretical basis of local government direct financing which are the theory of public goods, authority division between the central government and local government and the theory of fiscal decentralization.The second part analyzes practical problems of local government direct financing in China. It includes legal restrictions such as the"Budget Law", the current status of practice and legal problems, and focuses on the causes of legal issues which are the central and local government relations in China, contradictions between insufficient financial power and functional needs of local government and vulnerabilities of budget system, and performance evaluation system for leading cadres of local government.The third part introduces the legal system of foreign local government direct financing. This part studies U.S. municipal bond system, the Australian system of treasury bonds and Japanese local bond system, summarizes the experience in the legal system of foreign direct financing, and intends to resolve legal issues of local government direct financing in China for reference.The fourth part sets out to solve the legal issues of local government direct financing in China. The recommendation includes two aspects. One is to modify law and design the local public corporate debt system and the system of local government bonds to build a system of local bonds in China, on the basis of the argument of feasibility and necessity to issue local bonds. The other is to improve the regulation and supporting systems of local government direct financing in China, including the regulatory body, accountability and punishment system, government credit rating system, the system of information disclosure and so on.