Assessment On Local Government Debt Risk Of Hebei Province Based On Modified KMV Model

Since 2008, China’s local government debt gradually attracted the attention of theory and practice, especially in recent years, a large amount of local government debt, the debt funding gap and debt pressure has become the consensus of many scholars. As the backwardness of the Beijing-Tianjin-Hebei Economic Circle, in recent years the economy of Hebei province has maintained a good momentum of growth, and made much contribution to drive the local economic development. However, together with its economic growth is the problems of local government debt scale in Hebei province, and the debt risk gradually revealed. Based on this, this article takes local government debt risk assessment of Hebei province as the research focus, and tries to put forward feasible countermeasures and suggestions for local government debt risk control in Hebei province.First, the paper reviews the relevant literature at home and abroad with representative,obtained a valuable writing basis point from the theories, methods and models, and elaborate related concepts and theories. Second, using quantitative analysis and comparative analysis, the paper analyzed the overall situation in China, and the comparison of Hebei province and other provinces respectively from the local government debt scale, type, and borrowing main body of local government debt. Third, Based on the modified KMV model evaluated debt risk in Hebei province from 2016 to 2018, and draw the conclusion: The uncertainty of future economic development will affect the local government debt risk; Considering the maximum of solvency in the central government,Hebei province debt default risk is lesser, and debt is a lot of room to grow. But in the case of no account of the central government transfer payments, default risk in Hebei province is bigger, and it need to maintain vigilant. Finally, In reference about prevent debt risk on the basis of the experience both at home and abroad, the paper puts forward some countermeasures and suggestions to solve the debt risk of local government in Hebei province. That is debt financing process will be included in the government budget management; The second is the establishment of local government debt risk early warningsystem; Popularizing the government and social capital cooperation model; Fourth, adjust the mode of economic development under the background of the new normal.