Research On Local Government Debt Risk In China And Preventive Measures

Since the 20 th century, China’s economy is facing great challenges and major social changes. Because of a proactive fiscal policy and loose monetary policy, our local government debt has experienced 10 years of rapid expansion, and debt risks attendant has also increased. Local governments are facing serious debt risk, financial crisis and credit crisis what are bringed by debt risk. Therefore, we must strengthen the local government debt risk prevention, guide local government’s borrowing behavior, in odert to promote the healthy and sustainable development of local social and economy.In this paper, the author first analyzed various theories of local government debt risk and he overall situation of local government debt risks in China, and then combined with the author’s practice of audit for national local government debt and local financial and explored the local government debt risk’s situation and preventive measures by taking city A of Guangdong province as an example. This paper macro-grasped the status of the national and micro-analyzed an example.On the basis of the data, the paper comprehensive analyzed the debt risk of city A, the causes of risk, the impact on the future and the prevention measures from multi-angle and multi-level.Finally, elaborated the main conclusions and innovations of the article, and proposed future direction for further research.