Research On China's Local Government Debt Budget Management

For a long time, China's local government is prohibited borrowing their own debt by law. However, after the reform and opening up, with the rapid development of urbanization and industrial economy, local governments'financing needs continue to grow in order to boost economic growth and improve the infrastructure. Because of the tax sharing system reform makes the administrative power down and the financial power up, the financial pressure on local government further increase, so they have debt financing through various channels. In particular, as the investment plan about 4.trillion's putting into practice to address the financial crisis in 2008, local governments in order to get more matching funds have established a number of financing platform company. The debt has expanded rapidly, and breaks away legal supervision and restrain. Local government debt issue has become the focus of public attention and the important part of financial management reform.The thirty-fifth article of newly revised "People's Republic of China Budget Law" in 2014 stipulate that, funds of construction invested by the provinces, autonomous regions and municipalities under the State Council's approval, can be collected by debt financing, but the scale should be under the limits of State Council. "Opinion of the State Council on strengthening local government debt management" promulgated in 2014 point out that, we should give local governments a modest debt financing authority and arrange the local government debt and bring it into the full bore budget management. But local government debt budget management is still in the initial stage in our country and there is no reference model. There are many problems and disputes in the process of exploration and improvement. We need to strengthen theoretical research and further guide practical work. This is the research background of this paper.This paper regards strengthening the local government debt budget manag ement as the main line of research, in order to prevent local government debt risk, aims to improve the government budget system, and study by thinking of "theoretical analysis, practical investigation, international reference, counter measure and suggestion". The paper is divided into six parts, the specific re-s earch contents of each part are as follows:The first part is an introduction. This part is to make clear the background and significance of the thesis, overview and evaluate the related research results at home and abroad, determine the structure arrangement and research method in this paper, explain the innovation points and deficiencies of this paper.The second part is the general analysis of local government debt budget management. This part establishes the theoretical foundation by defining the concept of local government debt and determining the research caliber, analyzing local government debt budget management elements and constructing the system of the elements, analyzing of the theoretical basis of local government debt budget management based on principal-agent theory, power control theory and full bore budget management.The third part is the realistic analysis of the local government debt and the budget management in China. This part starts from the actuality of local government debt and debt budget management, analyses the problems of local government debt and budget management and points out the importance of strengthening local government debt budget management.The fourth part is the international comparison and experience of local government debt budget management. In this part, I select the United States, Japan, Australia, Brazil and other representative countries as the sample, comprise and research the experience of sample countries from the management of the legal system, the debt management authority, the way of debt, debt scale control, budget management and other aspects, in order to get some inspiration to the local government debt budget management in our country.The fifth part is the path choice and plan design of the local government debt budget management in our country. This part explains the basic principles and general ideas of local government debt budget management, structures the local government debt budget system framework constituting by the budget revenue and expenditure system, the budget level system and the budget operating system. This part also defines the process and content of the local government debt budget and designs two sets of local government debt budget plans in the near and future according to the reality of our country.The sixth part is the policy recommendations to improve the local government debt budget management. In this part, I put forward a series of measures to promote the further optimization of the local government debt budget management in China like improving the legal and regulatory mechanism, changing budget management concept, improving the financial budget accounting system and other related systems.