A Study On The Feasibility Of Chinese Local Government Bonds Independent Issue

As the European sovereign debt crisis continued to heat up, the United States sovereigncredit rating was lowered, as countries become scared when they hear the debt, our country’sdebt problem increasingly protruding. Huge debt balance to the central government and localgovernment struck a wake-up call.In the financial system of tax distribution, the local government of China bear muchpressure of public spending. In the condition of limited local fiscal revenue and transferpayment, they gradually formed a large number of debt, therefore,explore the financing waysand channels of local government to alleviate the contradiction between supply and demandof financial capital has become the focus problem. In the face of local government debt, theissue of bond has become an effective way to ease the contradiction between supply anddemand of financial capital.At present, the discuss to local government how to steadily issue bonds, theoretical andpractical circles also has a lot of debate. This paper argues that, first, through the developmentcourse and status quo of China’s local government bonds do a comprehensive review andsummarize problem, especially in the development process of local government bonds at thepresent time the central issuing local government bonds and pilot to issue local governmentbonds and other bonds with typical exploration significance to analyze them one by one.Analysis shows that bonds exist more or less some birth defects, that is bad for regulation,trading and distribution. Therefore, study how to regulate, autonomous issue localgovernment bonds is very necessary and urgent. This paper analyzes the present situation andexisting problems on the development of local government bonds, as well as the feasibility, itcome to the conclusion: wo should further build science operational frame of localgovernment bonds, from the process constraint on marketization, transparent regulation, andimprove the environmental regulation and market constraints. It’s the need of ease thedifficulties of local government debt and regulating the behavior of local government debt,and it’s the need of preventing financial risks, building a solid fiscal, creating a goodenvironment for the economic, political and social development.