The Research On China Local Government Debt Governance

Local government debt management is to solve the problem of local government debt and resolve risks of local government debt.Local government debt subordinates to bonds,basing on the Keynesian bonds theory, can be able to play a role in promoting regional economic growth.Before the reform and opening, the size of local government debt is small,after the tax reform, the asymmetry of property rights and powers,local government financing is limited,the scale of local government debt expansion rapidly,to the first half of 2013,direct debt of nationwide local governments need to is RMB 10.9 trillion,at the end of this year,debts are amounted to RMB 20.69 trillion, local government debt has a huge scale.Local government debt hides huge potential fiscal and financial risks for China’s econo my,and it causes a lot of influence.On the one hand,it contributes to national economic expa nding and growing,in addition give impetus to capital accumulation、 infrastructure and loc al fiscal balance, etc.; on the other hand,it crowds out private investment and curb economic growth,brings about local a lot of government debt and excessive dependence on land revenu e, furthermore capital investment couldn’t meet the development trend of social,serious irreg ularities,local governments is lack of constraints and doesn’t attach importance to risk early warning mechanism,exist many problems in financing platform,etc.Local government needs to find methods to deal with the problem of local government debt.The actual problem analysis of local government debt,the debt mainly concentrated in grassroots government,grassroots governments should be given more financial rights,developing revenue ability and debt repayment capacity debt capital mainly from bank loans,Banks must reduce local governments loans,local governments lending need to go through a rigorous accreditation, to strengthen risk analysis on expiring loan,repayment time mainly focus on the last two years,local governments must improve the recovery efficiency of investment projects to enrich financial funds;SBC,developing local government hard constraints restriction debt ratio and deficit ratio and establishing punishing mechanisms to constraint local government blindly borrowing behavior;lack of risk regulation,establish a risk warning mechanism,the introduction of market competition mechanism, through financing innovation the risk structure and improving the risk regulatory process,the establishment of risk assessment mechanism,the adoption of proportional method,the assessment from the traffic point of view,is not a constant observation,can predict the existence of local government payments crisis.Analysis of local government debt risk, it can induce financial risk,building financial sustainability assessment mechanisms is possible; conduct to generate financial risks, we must strengthen the bank’s risk management and control; and then there are likely to cause serious economic risks, the presence of local government debt crowding out private investment cases, local governments need to raise free money, do not take up public investment funds for money over the phenomenon, the central need a hard budget constraint firm.Local government debt has become increasingly prominent in the role of economic, institutional, policy and related governance recommendations systems,it is necessary to establish related governance suggestion system,from the legal, institutional, policy and governance, risk management, capital management, land resource management to orderly guide governance and achieve the purpose of treatment.