Local Government Debt Risk And Countermeasures

In 2008 America’s subprime crisis led to the financial crisis, and then extended to all over the world. Greece’s sovereign debt crisis broke out in 2009 and spread to the whole of Europe, to further strengthen social risk consciousness, the debt risk has been highlighted. The relatively large size of local government debt in our country, combined with the lack of some specification and management, therefore, lurking huge risk. In recent years, China’s local government debt risk has been widespread concern.In order to strengthen local infrastructure construction, accelerate the development of local public utilities, local government in the case of a shortage of funds, to raise funds through multiple channels, to a certain extent, make the local economy got rapid development, however, the local government debt there are a large number of non-standard, unreasonable. There are various problems of local government debt in China now, such as no necessary laws and regulations to standardize local government debt, there are a large number of recessive debt, a lack of reports and related disclosure system specification, and the regulation of the National People’s Congress at the same level, to borrow from the government at a higher level without restraint, the lack of prevention mechanism and risk early warning and so on. The existence of local government debt risk not only affect the image of local government, if the control does not reach the designated position, will produce great harm to the society. Need for local government debt in our country to establish effective management regulations, the local government debt management, prevent situation out of control, and to explore new development model. Based on the analysis of characteristics of local government debt in our country, the present situation, causes, risks, on the basis of proposed countermeasures and Suggestions to strengthen the management of local government debt.