County-level Risk Of Government Debt Taking Jianghai District Of Jiangmen City As An Example

Public debt management is an important element of public management of Government,and it occupies an important position in public finance research. Since1980s, the regionalfinancial crises caused by government debt crises have frequently occurred, such as thefinancial crises in Latin America and South-East Asia along with the recent sovereign debtcrises in Europe. Besides, the government debts of Japan and the United States have also gonefar beyond the warning limit. All these negative situations make people worry that a globaleconomic depression would appear soon. Thanks to the continued rapid economic growth,China’central government debt is still below the warning limit. However, our localgovernment debts are now much concerned about. When dealing with the internationalfinancial crisis, the Central Government launched the "4trillion Chinese dollars" investmentscheme and at the same time authorised the local governments to issue their local bonds. Untillnow the local government debts have accumulated so much that some economists fear that ifnot properly handled, these debts may result in a serious Central Government debt crisis,because local government debts implicitly are guaranteed by the Central Government.Therefore, how to find strict and effective measures to manage our local government debtrisks has become a hot topic in our country.This paper focuses on the researches of the reasons for local government debt risks andfeasible solutions to the problems brought about by such risks. Before writing the paper, theauthor retrieved much related literature, read many relavant academic books and papers, anddid a special study of the history of debt changes in Jianghai District, Jiangmen City,Guangdong Province. As a local government official working for the county-level JianghaiDistrict, after a detailed emperical comparison between the modern western local governmentdebt management and the present cases in China, the author of this paper holds the opinionthat the existing political and financial systems as well as the current governmentadministration are mainly responsible for our local government debt risks and thus necessarychanges must be made in the mentioned areas to ensure better managment and supervison ofour our local government debt risks. After all,only safe channels for local fund raising can helpus achieve sustainable development of our economy.