Debt And Debt Risk Of Local Government

The tax-sharing system was implemented since1994, which stimulated the vigor of the local economic construction, agriculture, forestry, science, education, sports and heath are booming in leagues, cities, banners and counties in Inner Mongolia Autonomous Region, social insurance, social welfare and social security also have made great progress, especially to "Golden Triangle" economic zone of Hohhot, having made great progress on their own economic speed and breakneck development of various social undertakings. Behind the prosperity, there are financial support from the central government and efforts of the government at all levels.With three global rating company cut Greek sovereign rating for fuse in December,2009, the Greek government broke out debt crisis first and soon spread to the whole Euro zone. With efforts of aids and deal with their own crisis, Europe’s economy is slow recovery. As Mr Wen said, we must not underestimate the severity and complexity of the crisis. Peace with sword in hand, with the rapid development in Inner Mongolia, the crisis here should be vigilant. Although it is thought that the government debt is in control in each government work report of the autonomous region, the positive fiscal policy goes with big visible debt of government and visible countless debt of leagues, cities, banners and counties, we have to concede this is the malaises of development in the future.However, such a significant financial problem has not cause of social concern. The author looked for and read articles of various subjects of Inner Mongolia local government debt, which were almost financial reports of National People’s Congress and People’s Political Consultative Conference while the investigative articles were rare. The reason is that because more people are focus more on the development of Inner Mongolia in recent years, foreseeing is domain.The paper is divided into four chapters. The first two chapters mainly discuss the subjective factors that cause government debt from two aspects of the government and government officials. For local governments, work ability of the leadership and the efficiency of government’s functions are dependent on achievements of the vanity project. The upper government also makes this as an index to assessment a local government and officials. Under the guidance of the value, the local governments and officials are impelled to enlarge the investment for the vanity project. The third chapter analyzes objective reasons for the government debt by statistical data. It is mainly due to fiscal imbalance of the local government and the function of the government is required to strengthen the ability of public goods provision. When the financial support is insufficient, the income is poorly, the local government has to develop by borrowing. The fourth chapter focuses on the present situation and the operation situation of local government financing platform, and tries to discuss the reason of the platform to be profitable enterprise or lose money, and then explores the influence on all aspects that caused by huge amounts of debt. At the end of the paper, by combining the conclusion of the existing research results and plus own experiences, the anther puts forward five suggestions for reducing government debt risks.