The Evaluation Of Provincial Government Credit Risk

The 2007 subprime crisis, and then the bankruptcy of Alabama Jefferson county, the 2009 European debt crisis such as events took place, it was found that, after entering the new century, government credit crisis is not only more frequently than ever before, but also more profound. The research on the problem of government credit risk has been more and more attention. Throughout most of the existing research on the problem of government credit risk, it is not difficult to find that the basic starting points are focused on government debt, which is a kind of pure economic evaluation. However, comparing with the other body, the government as a behavior of an economic activity has its own particularity. Profit maximization is not the only aim of the government. Under the condition of market economy, the position of the government decide that social functions are more important than relevant economic functions. The credit risk evaluation is essentially related to the comprehensive measures the performance status of all behavior person’s promises. Therefore, the government credit risk evaluation is not limited to a single economic level, and should be extended to social level.In our country, people cannot imagine that the government will fail. Even in recent years, local government debt increases quickly in our country. Under the background of the local government solvency began to widely questioned, the basic political and economic system in our country and the corresponding governance structure determine that the local government in China is not likely to go bankrupt. Only from the economic sense, government credit risk does not exist. The reform and development for over 30 years, our county have great achievements in economic construction. At the same time, the government social commitment cannot to be cashed. Government officials said a thing which they will not do. Corruption, power rent-seeking, even with the right pressure phenomenon, which are more and more prominent. The government’s credibility suffered severe damage. In this sense, the Chinese government’s main credit risk is not in the economic level, but in the social level. In front of us, it becomes a major issue to expand government credit risk evaluation from a single economic level to society level.This paper attempts to inspect a comprehensive risk evaluation system and method of government credit from the government’s two attributes about economic subject and public subject. So as to realize the expansion of the government credit risk evaluation. On this basis, this paper choose select the 31 provincial governments’data in 2012. This paper comprehensively utilize principal component analysis, DEA and the Logistic model to evaluate local government credit risk situation on the empirical. The results show that there is no risk of default on debt in the economy, public service is the important factor to influence the government credit risk. The credit status of 31 local governments at the provincial level has obvious differences. The credit status can be divided into four kinds. One is a delegate with Qinghai, Hainan and other 8 provincial governments, which comprehensive credit situation is the best. Another is a delegate with Jilin, Liaoning, and other 12 provincial governments, which comprehensive credit condition performance is the worse. Finally, based on related research results, this paper puts forward the countermeasures and suggestions of improving local government credit conditions.