Guiyang From Shunyi District Corporate Debt Financing Innovation

GuiZhou economy has been an unprecedented development with thedevelopment of the western, but it is still China’s economy short board. The state hasadopted policies to actively promote development in GuiZhou province, thatGuiyang which is the provincial capital city of GuiZhou Province should takeadvantage of the policy of economic development. The economic development ofGuiyang is constraints by location, and it need to be through increased investment ininfrastructure construction, and improve the business environment to promoteeconomic development. The construction of infrastructure related to the local fiscalexpenditure, but the general fiscal revenue of Guiyang is far less than to meetexpenditures. So it needs financing through other channels to meet their constructionneeds. Guiyang actively set up local financing platforms with financing throughbank loans in 2009. Infrastructure fund is invested large amount with low-incomeand long payback period, and a large number of urban construction loans posed risksin the banking industry. China began to rectify the situation of urban constructionloans in order to maintain the stability of the financial sector, so urban constructionfunding must find another channel. The form of corporate debt financing of Cityinvestments gets more recognition by senior management and theoretical circles.This corporate debt is actually a special kind of local government bonds ormunicipal bonds.ShunYi District issued corporate bonds used of local financing platform, that itprovided a good reference for urban construction of GuiYang. In the paper, itanalyzed the State-owned Assets Management Center of ShunYi District to issuecorporate bonds through Issuance of bond conditions, advantage of subordinateenterprises, the use of financing and credit rating, Concluded that the State-ownedAssets Management Center of ShunYi District had Advantages of integration ofresources, and it ensured safety of the security of corporate bonds with twocompanies jointly guarantee. There are negative factors in issuing corporate bands ofGuiyang compared with ShunYi District: Guiyang is far away from the politicalcenter, Guiyang is much lower than the ShunYi District to develop coping strategies.Geographical constraints lead to more costly of construction projects than ShunYiDistrict. Human resources can’t meet the demand for local economic development.The Guiyang industrial is more backward than ShunYi. As everything has two sides,Guiyang’s location makes an unparalleled advantage of ShunYi District. Firstly, it was more policy to support economic development of GuiZhou Province. Secondly,GuiZhou is not only rich in mineral resources but also suitable for developingtourism. Finally, it proposed strategies for development of the Guiyang localfinancing with corporate bonds. Firstly, Guiyang should increase the use of superiorresources. Secondly, it promotes the standardization of local financing platform.Thirdly, it promotes the bond security through improving security system, insurancesystem and the rating system to protect the interests of investors.