The Formation、Assessment And Management Of China’s Local Government Debt Risk

With the development of economy and society, our country local governmentdebt problem has been very prominent, resulting in the movement of political powerinefficiently and a threat to social stability. If the debts problem is not activelyresolved, It will be a serious threat to the national sustainable development.Therefore,In order to develop and build harmonious society,We need to discuss the problemabout the root cause for the local government debt, then estimate our localgovernment debt risk to seek effective solutions of Local government debt problem.On the one hand, the local government debt make up for the inadequacy of localfinancial capacity, fight against natural disasters, improve people’s livelihood andpromote social sustainable development,but on the other hand, the local debtaccumulation will affect the healthy development of social economy, even lead tosocial unrest such as the massive financial crisis and a series of social problemsThis paper introduce a simple interpretation about the local government debt ofChina firstly, then according to the game theory, the paper analyze the underlyingcauses of China’s local government debt risk through the model of completeinformation and incomplete information, Meanwhile, It combines the game theoryanalysis and specific level reason to analyze the local government debt risk in China.On basis of above studying, the paper estimate the present our country localgovernment debt risk degree. Finally my paper propose three aspects of China’s localgovernment debt risk management methods in the front, during and after the eventbasing on the game theory model, to the solution of the local government debt crisisin China, the local government bankruptcy mechanism is put forward for the first time into tentative plan.the paper proposed the establishment of local government guidingmechanism of bankruptcy. At the end of this article thinks that the pilot localgovernments issue bonds is the game outcome between the central government andlocal government.The thesis is divided into seven chaptersThe first chapter is introduction. This chapter briefly introduces the researchbackground, theory significance, the practical significance and research methods.The second chapter introduces form, assessment and management of literaturereview of the local government debt risk in China. This chapter summarizes thestudies about domestic and foreign relevant local government debt from the localgovernment debt risk formation, evaluation and management.At the end of thechapter of this chapter pointed out that the main contribution of this paper.The third chapter analyzed the formation and classification of the localgovernment debt of China. This chapter firstly detailed introduction about our countrylocal government debt formation, then according to the World Bank experts on thedebt of local government classification method, the paper carried out a detailedclassification research to our country local government.The fourth chapter analyzes the local governmental debt risk formation. Thischapter first classifies to the local government debt risk in China, and then from theangle of game theory, analyzes the reason of forming our country local governmentdebt risk, At last, the paper unites the game theory analysis with the system cause offormation with local government debt risk in China to analyze the China’s localgovernment debt risk.The fifth chapter evaluates the local government debt risk in China. This chapterfirstly introduces the current assessment of local government debt risk in China aswell as the method of selection of index, then selecting the suitable risk assessmentindex system and the risk assessment methods tot estimate China’s local governmentcurrent debt risk.The sixth chapter is about the local governmental debt risk management on thebasis of the game theory analysis. In this chapter, according to the fourth chapter of the local government debt causes t analysis put forward to resolve the debt risk oflocal government management methods at present in China: the central governmentmust be set up a strong central government image during the supervision.The seventh chapter is about the game result between the Central Governmentand local government in China presently. This chapter firstly regards the localgovernments to issue local government bonds as the game result of the localgovernment and the central government, and then summarizes the full thesis, pointsout that as long as the central government to be a good regulator, our country localgovernment debt risk of local government debt will not lead to our local governmentcrisis.