Risk Assessment And Control Countermeasure Of Local Government Financing Platform

As now China’s economic development is on the positive transformation process, the development funds required by local government at all levels is huge. It cannot only rely on the local governments’income themselves and the central government’s insufficient finance subsidies, which can’t completely satisfy the need the need that local economy grows quickly, thus stimulate the local governments objectively to take initiatives attracting finance support from financial market. As one of the major players in the financial market, Local governments have to be familiar with the characteristics of various financial tools, using various financial means to get funds that are to meet its own development needs. Thus, in the new market environment and development opportunities, the local government at all levels actively to find new financing model, some local governments using the investment and financing company have appeared, especially after2008, as international financial storm on China’s development, the local government financing platform is expansion rapidly under the present situation. So how to control and avoid the generated risk of local financing platform in the process of the development has become a hot topic. It also stimulates the academic circles over the years doing studies on how to guard against governmental financing platform risk, improve the management of government financing risk prevention as well.This paper was written according to the main line which is "putting forward the problem, analyzing it, and then solving it". First of all, introduced the background of the local governments financing platform loans appeared and analyzed the current situation. Then took advantage of information about Taizhou’s government financing platform to analysis the causes led to those related risks. Finally, put forward some countermeasures, from the points of system reformation and the risk management system construction separately, to guard against and dissolve the local government debt risk, trying to establish scientific and feasible loan risk assessment model according with Chinese characteristics. The aims of study on local governments financing platform risk is to control the risk in a reasonable scope, and guarantee China’economy and society develops on a sustainable and healthy way. At the same time, help to improve and deepen the theory research on public sectors financing, to provide theoretical support and reference suggestions for scientific evaluation and effectively solving the local government financing risk problem. The author made great efforts to put the related theories into practice, based on the real situation of Taizhou, in Zhejiang province, governmental financing platform developments, the organic combination of theory and practice realized. Therefore, this research has an impressive significance of its reality and practical value.