Research On Local Government Bonds Issue Of Jilin Province

Since the reform of tax distribution system in1994, China has redivided central and local fiscal power, and executed the policy which transferred fiscal power to a higher level but routine power to a lower level. This restricted the taxation capacity of local government, but extended the authority and scope of local government’s public expenditure, which thus resulted in the imbalance between fiscal revenue and expenditure of local government, and even the difficult financial situation. Objectively, the failure to provide necessary public products would lead to local government’s lack of fiscal function, and weaken local government’s self-supporting ability. Now, governmental debts in Jilin have incurred various problems. When the methods such as finance and tax income cannot acquire the required fund for public products under existing financial system, the issuance of local government bond will become not only a new financing means and channel that alleviates the supply-demand contradictions of local government’s financial fund, but also an effective approach to the governance of local government debts. As Jilin does not issue local government bonds for the moment, this paper studies the necessity of issuing local government bonds in Jilin as well as presents corresponding strategies and suggestions for the issuance, including design of issuance mechanism, sound establishment of regulatory system, evaluation of bond-issuing scale and risk, etc.This paper consists of five parts, including introduction, theoretical basis for local government to issue bonds, necessity for issuing local government bonds in Jilin Province, strategies and suggestions for issuing local government bonds in Jilin Province, and conclusions.