Research On Local Government Debt Risk And Its Countermeasures

The quality of a country’s debt management and it’s debt risk level have very broad and deep effects. Although the local government debt in the early urbanization of China has played a very active role, it did made up for lack of local financial resources, it has also accelerated infrastructure construction and social development, However, due to lack of necessary management and restriction, the current situation of China’s local government debt is worrying. The debt is not only large in scale, it is also single source, and often contains a huge financial risk. It can easily lead to financial crisis of local governments. It can even affect the entire China’s social and economic development.Based on the inquiry and research of the size of local government debt, as well as examining the source and the cause for the formation of the local government debt risk, and by drawing rationalization measures relevant to developed or developing countries risk warning and crisis response, this article will put forward some useful thoughts on how to resolve China’s local government debt risk. However, many institutional factors cannot be done but changed overnight. In order to achieve as soon as possible the regulation of our local government debt risk, establish workable debt risk early warning system is a very good idea. This article attempts to choose an index risk warning mechanism. It attempts to determine the range and other technical aspects of the operation and before, during, after the trinity organization and management systems combined the "green, yellow, red" warning message lamp, so that our local government debt risk can be identified as early as possible, and we can come up in time with strategies to avoid becoming passive. I believe that this research is not only an analysis and summary of problem of local government debt risk. It also provides a useful perspective of how to solve this problem in the future.