Evaluation And Prevention Of The Local Government Debt Risk In Yunnan Province

The problem of “The government financial powers enhanced and administrative powers increase ” has highlighted with the reforming tax system and it makes the finance gap widening.In recent years,China's economic development has entered a new normal.However,the fiscal revenue growth rate which is relation to the economic development level is slowing.Under the circumstances,the local people's government at various levels throughout the country do the debt financ ing from multiple sources.Especially,after 2008,the debt scale of national local government is on the increase and several local government's debt risk has exposed.What is the situation in Yunnan Province which is famous as touris m.The main results are as follows.First,deal with the literature research achievements about domestic and overseas local government debt risk from qualitative and quantitative analysis.Second,we get the basic theory by collating of data about the local government debt and method of evaluating the debt risk.Meanwhile,the reason for the formation of the debt risk of Yunnan Province is explained in various ways.In addition,the paper use the extensional KMV model to evaluate the local government debt risk in Yunnan Province by analyzing that the central government provide the protection for the subject of the local government debt which is not independent and the effect of the transfer payment is considered.In a word,we get the conclusion that the probability of local government debt breaking the contract is relatively low and the risk of the debt is controllable.At last,the paper propose that how to control the risk of the local government debt by controlling the scale of the debt,optimizing the structure,managing the budget,disclosing the information,assessing the accountability mechanism,warning the system mechanism and innovating the debt financing.