The Establishment Of The Early Warning System Of Our Country’s Investment And Financing Platform Of Local Government

The proposition of local government investment and financing platform is depended on theory of government investment and financing. Due to the particularity of public articles, some of the social goods which are indispensible for social activities cannot be offered by principle parts. Combine with other three conditions, the government activities include providing goods, services and correcting market failure. However, for the reason of the special fiscal and taxation pattern of China, the rights of finance and active from central government and local government is badly imbalance. After the revolution of system of tax distribution in1994, the range of dropping of income from local government is larger than central government. What’s worse, this situation of imbalance from income and expense is lasting in the next years than the financing gap is larger and larger. In the context of inadmissibility of issuing local bonds, the emerging of investment and financing platform lighten the pressure of local government financing gap successfully and input great power.Local government investment and financing platform is funded by the local government, it is the comprehensive public service platform that can do financing activities and investing activities for local economic development. The establishing of local government investment and financing platform, in theory, is good for remission local financing gap, expanding ways of construction fund and improving the efficiency of money. But with the rapid development of the local economy, the operating of local government investment and financing platform is changing from benign operation to overload operation. Under the protection of local credit, the debt of local government investment and financing platform is heavily which belongs to local government. Under this conditions, local development still depend on platform, the number of platforms has driven increasing amounts. Local debts reach another record high. The volcanic behind the development of local economic is accumulation energy and ready to eruption.This article apply the theory of government investment into the process of investment activities and combined the local government investment and financing platform with the development of local government. What’s more, in this article the model of platform running will be study especially the venture parts and a delicacy, practical and efficiency early warning system will be built. Through the study of the running of platform, it will improve the efficiency of local government investment and financing platform in order to serve the local economic. Through the study of Shanghai local government investment and financing platform, this article is trying to explore the early warning system and provide practice examples for building our country’s local government investment and financing platform. In the respect of method innovation, reference to before scholars, this article will build the more complete model of local government investment and financing platform combined with principal component analysis, analytic hierarchy process and haziness synthesizes performance evaluation method.This article research the establishment of the early warning system of our country’s local government investment and financing platform in five parts. First, analysis the theory of government investment and financing due to Chinese financial revenue and expenditure, theory of government investment and financing action economics and the condition of local government investment and financing platform. It consider that natural monopoly, externality, public goods and information asymmetry, fiscal decentralization and the limit of ways of capital source are the primary reasons of arrested development of local government investment and financing platform. Second, this article analysis the economic environment and policies and laws in respect of the macroscopic, mesoscopic and microscopic economics and consider that local government investment and financing platform is affected by international economic, international political, domestic economic, domestic political, location, regional economic, regional policy and the condition of finance itself. Third, study the early warning system of local government investment and financing platform in respect of the transmission mechanism of local government investment and financing platform, platform risk quantification, establishment of the local government investment and financing platform and inspection of the early warning system of our country’s local government investment and financing platform. Apply the haziness synthesizes performance evaluation method as the method of the judgment of the local government investment and financing platform early warning system and establish a more perfect target system. Fourth, analyse earnings and risk of the Shanghai government investment and financing platform and study the early warning system of Shanghai. Explain the principle factor of Shanghai investment and financing platform by using principal component analysis and come up with conclusion that micro risk factor is the most significant impact among numerous factors. Apply haziness synthesizes performance evaluation method into Urban Construction Investment Holding Company and draw a conclusion that Shanghai investment and financing platform maintained the high risk and had not been controlled effectively after2008. In the end, come up the conclusion of the risk of Shanghai investment and financing platform and the suggestion to establish the early warning system of local government investment and financing platform in the future.