The Research Of Local Government Debt Risk

October 30,2008, a draft led by the Ministry of Local Government on strengthening debt management plan has been submitted to the State Council, awaiting approval, which means that borrowing local government debt will move toward legalization and standardization. But the country is by the international financial crisis, some medium-sized enterprises are facing falling profits and the collapse of the real economy further into recession, coupled with our local government debt causes more complex, many local governments already facing a crisis of debt risk. Thus, through scientific analysis and determine a reasonable risk and debt sustainability, strengthen the debt laws, regulations and management mechanism, establish a sound mechanism to resolve the debt faced by the local government become an important task. Into early 2009, the Central Government to provide matching funds in order to enhance the local and the capacity of local government investment decisions on behalf of the issued 200 billion yuan of local government bonds. Then starting from March 2009, the central government began to represent the distribution of Xinjiang, Anhui, Henan, Sichuan, Chongqing, Liaoning, and Tianjin and other government bonds. So, in order to reduce the risk of government debt to a minimum, we strengthen the local government debt risk more effectively monitor the implementation of scientific urgency and necessity.The paper is divided into the following sections:The first part of the introduction. This section is to study the background and the issues raised, followed by the introduction of domestic and foreign government debt risk situation, once again described the purpose and significance of this study, the article then briefly describes the ideas and methods. The second part, on the theory of local government debt risk analysis. This section of the local government debt risk and types of related concepts are introduced, the current local government debt risk assessment theory and methods commonly used to summarize. The third part is the risk of Local Government Debt Analysis. In this section, the paper is used to determine the weight method of combining the subjective and objective, comprehensive assessment of China's 25 provinces debt risk profile, and then obtained 25 provincial and municipal debt risk status; then results conducted a cluster analysis and local government debt risk in China and around the financial and economic risk analysis; Finally, is this the Recessive, or preliminary calculations of debt. The fourth part, on Local Government Debt Risk Causes. Risk of local government debt has two causes:First, my powers and financial authority of local governments do not match; Second, because our local government debt management problems led to the cause. The fifth part of the risk of foreign control of local government debt experience. First is to introduce the European Union, the United States, Japan, Brazil and other foreign local government debt risk management situation, and its claims in the lift, security, crisis management and local government debt by the form of debt management and other aspects of responsibility compared to arrive at Our local government debt management in China. Partâ…¥, for the prevention of local government debt risk of the proposal. In this section, the paper on local government debt against the risk of the ideas and objectives are described, and then made against the local government debt risk of specific recommendations.