The Studies On Legal Control Of China’s Local Government Debt

The Budget Law provides that local governments must maintain the balance ofincome and expenditure, except as otherwise provided by law and the centralgovernment. It is forbidden to local governments to issue bonds and to producedeficits. But China’s local government with a large debt, repay pressure and debt risksin increased year by year, draw the attention of the whole society. The governmentsimplement the Tax distribution fiscal system and cancel agricultural tax. This causedlocal governments to increase the gap between income and expenditure. For thedevelopment of the local economy and the completion of development indicators,Local government circumvents the law and financing to lead to increased risk of debt.Additionally, China’s local government debt monitoring system is not sound and has alot of hidden debt. This exacerbated the risk of local government debt, so that risksmay change as the crisis. However, Experts and scholars have studied the control oflocal government debt risk is mainly from finance, management and other disciplines,who rarely set foot in the field of law. Although China has developed a lot of financiallaws and regulations, but these legal documents still inadequate on the whole. Usinglegal means to control local government debt risk, not only as the basis for a soundlegal system, but also need to seriously implement. China’s local government debtfrom the financing to use and then repay, each link has a big flaw. So we must controlof local government debt risk reasonable through legal. Regulators are the key to thelegal control of local government debt risk. Whether financing, capital use or debtrepayment, regulation must be running through. This paper, with full respect foracademic research in other areas, analyze defects China’s local government debt riskcontrol by law perspective. The paper reference to foreign mature experience and putforward some suggestions of local government debt risk control law measures. Theauthor expect that regulation borrowing behavior of local government, improvecontrol debt supervision of local government, change local government the status quoof debt risk.