Financing Strategies Research Of Small And Medium-sized Cities Urbanization

Chinese average urbanization rate has been53.73%since2013, basically flat with the world’s average level. The urbanization construction has been great engine promoting economic development, improving residents’ living standards, and boosting domestic demand. While the growth and populace absorption of big cities have been decreased, small and medium-sized cities just become prioritized.With the advancement of urbanization, small and medium-sized cities will produce great financing needs. However, the financing faces with many problems, while local governments have enormous fiscal gaps, excessive dependence on land finance and the existing local government financing platforms risk by anxieties. Small and medium-sized cities are lacking of industry support, and limited to attract funds from the society. Although facing financing predicament, they get national policy supports, with great industry blueprint, environmental carrying capacity which mean a high potential of financing.Based on the economic growth model, small and medium-sized cities’ urbanization construction will produce more than16trillion financing needs by2020. To meet the huge financing needs, small and medium-sized cities have to make overall planning, pinpointing governmental roles with market full playing in resource allocation. Small and medium-sized cities’ urbanization can be divided into profit-making projects, operating and non-operating projects. For profit-making projects, mainly use PPP to max with the marketization. For operating projects, the governments need to use the fiscal lever, guiding and encouraging social capital to participate. The non-operating projects need a lot of governmental direct investment, through the enrichment of local government fiscal capacity to meet the targets.Urbanization construction financing of small and medium-sized cities is one of the hard cores in urbanization construction, only the combination of governments planning, fully market-oriented in capital allocation, diversified financing participations.