City Construction Project Financing Under Financial Regulation

Urban construction is the foundation of urban development in the city, urban construction project is the performance of urban construction. However, not only in Hangzhou but also in national, urban infrastructure financing difficulties exsit. The mainly performance are single financing channels,subject confusion, high financing costs and high degree of financial control aspects.Theory of Agglomenration economics explains the necessity of urban consruction, theory of public good explains local government is an important urban infrastructure providers,theory of project distinguish tell us we should take different financing model for different types of infrastructure projects, theory of stakeholders explains the introduction of private capital into urban infrastructure areas can ease the underfunding problem of it. Existing financial control laws and regulations prohibit local governments to issue municipal bonds,and strictly control the size and the number of corporate bonds, equity financing is very difficult, so the local government can only take the issue of investment fund channels to introduce private capital into the field of urban construction investment.In the paper, we comparative analysis four kind of financing models, in order to design a set of Hangzhou urban construction financing platform for the company’s large investment fund financing model. Government agencies as a promoter and the actual controller initiates a fund company, hire a professional financial institutions responsible for the daily management and operations fund activities, through the way of financing from financial institutions to establish first financing model, According to the urban construction financing platform built by matching risks and benefits of the project to establish the second financing model. Fund companies need to pay attention to the operation of a variety of risks prevention and Fund’s redemption issue in the end. Theory of investment fund, sufficient private capital in Hangzhou and financial professionals recognized in the program shows that the program is expected to some extent alleviate the financing problems of Hangzhou urban construction fields.Innovations of this paper are:First, the combine of economic theory and reality, subdividing types of urban construction projects may indicate the possible direction of crack financing difficulties; Second, fot the large-scale financing platform for the company in Hangzhou, we proposed the establishment of urban development fund which can make various stakeholders gain improved spatial to attract private capital to enter the field of urban construction; Third, we suggest improvements and perfect measure for existing financing platform for Hangzhou status and problems.