Macro Regulation Study Of Local Government Debts Risk Prevention

Since2008, USA the outbreak of the sub-prime crisis, the worldeconomywandering in the turbulence, the European sovereign debt crisis, with theadvent of these negative factors, China government and public opinion alsobegan topay more attention to the problem of local government debt.Local government debt financing is an important policy tool of the public financesystem, the effective supply of public services, improveintergenerational equilibrium,has active significance to improve local governance. But if the blind to rely on debt tostimulate the economy and social development, it will easily lead to local governmentdebt crisis, damage the credibility of the government, is not conducive to socialstability and harmony.China’s local debt has roots in China’s political system andfinancial system,but since the reform and opening up, as China’s industrialization andurbanization process accelerated, the local construction financing demandrapid growth,the local government in the process of promoting the development of local economy inbear more pressure. Because the local finance income instability and the overalleconomic situation downturn, the local government had to through the financing debtof local economic development, local investment and financing platform of the numberand scale of financing is also on the rise. Especially after the financial crisis in2008, inresponse to the economic downturn trend, the introduction of the economic stimulusplan, greatly accelerated the expansion of local government debtscale.The local government debt scale unceasing expansion, the debt risk is noteffectively controlled, this phenomenon has attracted increasing attention. If the risk isnot effectively regulate and control will cause local investment and financing risktransfer to financial risk, financial risk, affecting the normaloperation of socialeconomy, social stability and harmony. Through theregulation of macro-control law, toexplore the path to prevent the local government debt risk, to reduce the localgovernment debt risk, to achieve a smooth operation of macro economy. This paper mainly through the analysis of the reason, our local government debtformation characteristics, scale, found that the risk of local government debt risk, andrealize the importance of reducing the local government debt risk, learn from advancedforeign countries successful experience in thecontrol of local government debt risk,from the macro-control law point of viewto explore the relevant protective measures,better for local government to promote local economic development, social stabilityand harmony in the process of transition function to explore the path.