Research On Iocal Government’s Debt Under The Perspective Of Government Financing Platform

Currently, due to the economic system, the political system, historical reasons and some other objective factors, the government debt has gradually developed from personality issues into multilateral issues for many local governments. Objectively speaking, the government debt provides some additional funding for local governments and promotes local economic and social development. But its rapid expansion and big liabilities scale, make it" double-edged sword affecting China’s economic development and social stability.In recent years, the emergence of local financing platform---an administrative means of finance provides local governments a new way to raise funds. From a macro point of view, the pressure to balance revenues and expenditures directly leads to the expansion of local governments’debt since the financial power of local governments separates from administrative power. Analyzed from the microscopic point of view, local governments’strongly liabilities impulse as a "rational economist" should be responsible for the debt. Nowadays, local governments shoulder a heavy burden on public expenditure, so financing platform debt as an effective the means of financing for local government will long-term exist and develop. Therefore, scientific and reasonable debt management measures, with safety, efficiency, and specifications as the goal, should be taken in face of the reality and complexity of the causes for China’s local governments debt. On one hand, it is necessary to play the positive impact of the administrative means of finance; on the other hand, local governments should effectively control the scale to reduce debt risks. In respect of security improvement, countermeasures include gradually digesting the stock of debt, effectively controling of new debt, and risk warning. In respect of efficiency enhancement, the main countermeasure is to strengthen the planning and management of the debt capital, trying to reduce the cost of debt capital acquisition. As for normative aspects, the main countermeasure is to improve the supervision and management system of local government debt, adjust the central and local financial allocation mechanism, and strengthen the management of bank credit and improve evaluation mechanism for officials.