Local Government Debt Risk Transmission Path And Immune Mechanism

With the rapid growth of city’s economy, the scale of urban construction is expending continuously. Local government debt is rapidly increasing as the accelerated urbanization. The previous law prohibits local government from borrowing money. But the huge size of local government debt is an indisputable fact. In the last couple of years, China has ordered a nationwide audit of all government debt and disclosed various provincial and municipal government debt. Massive government debt been known and caused widespread concern in the government’s attention and social.Since Chongqing has became a municipality, Chongqing get a high-speed economic development. But local government debt increase every year.If the government does not promptly resolved Chongqing government debt problems, where the debt crisis is likely to erupt. Not only does it hinder Chongqing economic development but also the country’s economic development and social stable.This paper is on the risk of Chongqing government debt taking the form of case studies. It collects and elaborates Chongqing government debt in great detail including debt situation, the type and characteristics of the debt risk on the basis of previous research related. Summarizing the risk then as four risk transmission mechanisms:fiscal path, banking path, real economy path, capital market path. Illustrating the local government debt risk prevention and resolve is a wide and high-impact systems engineering in further. Solving the local government debt problem can not just rely on the local government itself, but also in the place of the government, to mobilize broad participation in a variety of positive social forces.Thus this paper build local government debt risk of the immune system in such a broad participation under the guidance of the immune system theory, auditing functions and local governance theory. The system includes a governance mechanism mainly in local governance and government audit which is abreast of state administrative agency to supervise local government debt management, protect and enhance management efficiency, make the immune system more enriched and perfect.