Comparative Research Between The Debt Of The Local Government Platform Corporate And The Debt Of The State-owned Enterprise

Local government corporate begins with the 1980s and the quantity of it expands rapidly under the background of expansionary macro policy in 2008. It provides a lot of money for the infrastructure construction and economic growth of local government. With its positive role, the scale of debt balloons. According to the announcement of Auditing Adminisration, the debt balance of local government corporate,up to 6.9 trillion yuan, is the main part of local government debt. The early stage of the state-owned enterprise is faced with social burden and low management benefit. The debt problem becomes gradually explicit because of the economic reform. They are seemingly different between the two kinds of debt, but there are many similar aspects comparing the behavior characteristics, theoretical basis and debt source. The forming mechanism of debt is the result of game result among the government, enterprise and bank. After the reform of state-owned enterprises, aiming at establishing modern enterprise system, local government corporate becomes a new style of " integration of government administration with enterprise " phenomenon.This paper tries to contrast the differences and similarities between the local government corporate and state-owned enterprise. First of all, it collect the relevantly domestic and foreign research of debt consolidation. Then, it analysis the basement of debt, according to the local government function, the Ricardian Equivalence theory, MM theory extension and the theory of corporate governance. On the basis, it establishes a framework of game analysis to study the forming mechanism of debt, and uses the actual case to prove it. Then, it summarizes the root of debt is the external system environment and the internal governance structure. Finally, it is concluded that the local government platform and the early stage of the state-owned enterprise are consistent. On the experience of debt restructuring and reform of state-owned enterprises, it puts forward to clear the relationship between the local government and the government platform enterprise. The government should create a service-oriented administrative system, combining with the reform of platform, budget management of public fiscal reform and optimizing capital market.