A Study On The Evaluation And Countermeasures Of Local Government Debt Risk Under The New Normal State

After the global financial crisis in 2008,the central government put forward a 4trillion bailout plan, which the central government investment funds while local governments were asked to resolve the remaining funds. The matching is on behalf of the central local government debt and local government financing platform, which is far beyond the range of local government financial resources. Once the local government debt is more than a reasonable level, this excessive expansion and spread will restrict the sustainable development of the economy. Serious words, it may also have a negative impact on social development, triggering social conflicts. Therefore, it is urgent to establish a set of reasonable, comprehensive and effective mechanism to prevent the outbreak of local government debt risk.With the reform of national economic system and the continuous improvement of economic policy, China’s economic development has entered a new stage. The central economic work conference held in 2014 marked the new normal for China’s economic and social development. This new norm is mainly manifested in the following four aspects: the transformation of economic growth ideas, the adjustment of macro control policy, the transformation of economic structure and the optimization of production factors. And these four aspects of the changes that have occurred or are about to happen will have more or less, or positive or negative impact on the prevention and control of local government debt risk. Therefore, our research should also adapt to the new background, make the corresponding changes to meet the requirements of the new normal.Based on this consideration, this paper expounds the current situation of local government debt and the future development trend in the context of the new normal economy. Then, according to the principle of simple, clear and practical, this paperestablished the local government debt risk early warning model, based on the advanced traffic light warning model and analytic hierarchy process. And this paper uses this model to evaluate the government debt risk status of 30 provinces(autonomous regions and municipalities directly under the central government) from eight regions of China hierarchically and comprehensively. On the comprehensive evaluation results, We can know that all provinces and cities are in a state of risk and nearly 1/2 provinces and cities have reached the red early warning stage, the local government debt risk problem has become very serious. Therefore, this paper argues that the formation of local government debt risk is a complex process with many factors, which are related to the economic system, the financial system, the administrative system and the debt management system. Therefore, this article believes that we need to start from the four sources at the same time to carry out a full range of prevention and control, in order to effectively prevent the outbreak of local government debt risk. Opinions are as follows:First, to actively improve the economic system, as soon as possible to achieve economic decentralization. Second, steadily push forward the tax reform, gradually standardize the tax system. Third, actively promote the debt management system, effectively guard against the risk of debt. Fourth, strengthen the administrative management, strengthen the debt management.