The Analysis Of Investment And Financing Of The Local Government And The Countermeasure Research During The Accelerating Transformation

Along with the accelerating transformation of China’s economy,the local government must meet the demands,In order to promte the economic transformation,the local government must offer effective service,transformating to a service-oriented government.The responsibility of the government determines the local government in China needs a lot of money to complete the task.This paper analyzes the local government financing model firstly. There are some problems in three main modes of financing, financing with the land, financing with the platform and financing with central government transfers. Due to the limited land resources in land finance financing, it faced with the problem of unsustainable;meanwhile financing platform facing the pressure of supervision; and the central transfer payments in the proportion of general transfer payments too small with a large proportion of special transfer payments.So, in order to analyze the efficiency of local government investment, this paper uses econometric model with relevant data from 2000 to 2013. Analyzed the Crowding-in Effects and Crowding-out-Effects on private investment in the field of six industries with highly competitive. And there are electricity, gas and water production and supply industry, water conservancy, environment and public facilities management industry, transportation, warehousing and postal services, education,culture and health science, public administration and social organizations and government. The results are shown that in electricity, gas and water production and supply industry, the regression coefficient is 0.5087;while,the regression coefficient in science, education, culture, health and career is 0.63391; and in Geological Survey and Water Conservancy, the regression coefficient is 2.6276, which show that these three class have Crowding-in-Effects However, the regression coefficients in the transport, storage and telecommunications industries and of are-2.01 and-1.029,respectively, both regression coefficients are negative, indicating that our government’s investment in these two areas have been too much and create cording out effect for private investments. And this paper also showed that the structure in local government investment is irrational with low efficiency.Our local government is facing a serious shortage of funds due to the inefficient investment and financing model with the implementation of the tax system and coupled the shifting powers on property rights and authority rights. In order to improve the efficiency of local government financing effectively, we conclude the successful experience of domestic and foreign investment and financing of local government. Combed the experience in United States, Germany, France and some cities, such as Beijing Mode(the government-led engagement model innovation),Shanghai Mode(the pluralistic coexistence mode) and Chongqing Mode(the eight companies develop together mode). And other cities in China can benefit a lot form these experiences.Based on the above analysis, in the investment field this paper argues that the local government should adjust the investment structure,increase the investment of the public areas in science, education, culture, health and so on,reduce the investment in the field of transport, storage and telecommunications industries,gradually withdraw from the competitive field, improve the investment structure.In the field of finance,the local government should actively introduce mechanisms for public-private partnerships(PPP),use innovative models,including the LBO,the BBO,the BOT and the BT.