Research On The Local Fiscal Capacity For PPP Projects

With the deepening of China's fiscal decentralization reform,China's overall economic level showed a steady upward trend.People's living standards gradually improved,and people's public demand is increasing day by day.The applicability of the investment model of public projects dominated by the government and the state-owned enterprises is gradually weakened.Investment model changes to the multi subject public project investment model participated by the public sector and the private sector.PPP mode is a new type of public project investment mode of public private partnership.To a certain extent,it has made the private sector play an advantage in financing,technology and management.It also makes the public sector played an advantage in policies and regulations,land resources.It has been widely used in the field of infrastructure and education and culture,etc..PPP model is a new type of cooperation between the public sector(government departments)and the private sector.In order to reduce the government's financial burden,to strengthen infrastructure construction,to improve the efficiency of government investment and management,the government introduced the PPP model into the construction of public projects.Since 2014,China promoted the PPP model vigorously.China gives it more comprehensive guidelines on policies,regulations,financing and risk sharing etc,.However,new problems continue to emerge as the actual operation of the PPP projects.Some of the projects lurk a lot of unknown risk factors.Blind development of these projects may lead to an increase in the implicit debt of local governments at all levels.This may reduce the efficiency of government investment to a certain extent.So when arrange the PPP project,the government should take into account the potential of the explicit and implicit fiscal expenditure responsibility.The government should also fully consider the financial capacity of local governments at all levels.In addition,the government should set up the financial expenditure ceiling for the PPP project.The financial capacity is the focus of the parties concerned in the promotion of the PPP model.On 7 April 2015,the Ministry of Finance issued the "government cooperation and social capital to finance projects bear argumentation ability guidelines"(Finance[2015]no.21).In order to adopt.the PPP model,The projects payed by local governments or subsidies for the feasibility of public goods need to demonstrate the ability to finance the responsibility identification,estimates expenditure,assess capacity,disclosure information and so on This policy also clearly pointed out that the financial sector at all levels(or PPP Center)is responsible for the organization to carry out the work of the financial capacity of the administrative region.At present,the research of PPP mode in our country is mainly focused on the application of PPP mode,the meaning and classification,risk management,credit rating and other fields.Research on the fiscal capacity of local governments is relatively small.Therefore,in order to reduce the hidden risk of PPP model,the research on the financial capacity of the local government in the PPP project is imminent.On the basis of reading a large amount of relevant literature,the author analyzes the influence factors of local government financial capacity from the perspective of local government revenue sources.In order to make the PPP model play its biggest effect in the supply of public utilities in our country,the author also describes the comprehensive factors of their own financial capacity should be taken into account when the local government promote the PPP model..