The Construction Of Local Government Debt Risk Early Warning Management System

During the "13th Five-Year Plan" period,the supply-side structural reforms gradually deepened,economic growth slowed down,and local financial operations faced problems such as increasing revenue and expenditure and the growth of local government debt.The new Budget Law in 2015 sets clear requirements for local governments at all levels to establish debt risk assessment and early warning mechanisms.Therefore,establishing a reasonable warning system for local government debt risks is very important for all levels of government to strengthen debt supervision and ensure financial security.This article selects the factor analysis method as the main research method of this article by reading the research results of scholars at home and abroad and combining with China's national conditions.Combining the data of the statistics department,the financial department,and the audit department,the paper summarizes and analyzes the scale,formation reasons,debt balance and debt ratio of local government debt in China,and the risk points in the development of local government debt.The overall situation of debt risk has made a preliminary judgment that the overall risk is within the safety line and the risk is high in some areas.Through consulting data and studying policies,we have summarized four major issues in the government debt supervision in China,providing ideas for the next choice of indicators.On the basis of the selection of indicators,international experience,and domestic and foreign research results of rating agencies,combined with factors such as China's economic development trend,fiscal debt file policy,data acquisition difficulty,China's government debt scale and characteristics,the design was finally designed.It covers the three aspects of local government debt,local government financial resources,and regional economic strength.It consists of nine indicators that form a risk metric system.After standardizing the data collected in the previous period,the data was subsumed into the index system,and then factor analysis method was used to calculate three common factors and one risk factor,completing the theoretical construction of the local government debt warning system.By using the 2016 economic,financial,and debt-related data from 31 sample regions,an empirical analysis was conducted on the established local government debt warning system.According to the actual economic situation of each province,31 sample areas are divided into 3 groups(economically developed regions,moderately economically developed regions,economically underdeveloped regions).By comparing the risk scores horizontally across regions within the same group,it was concluded that Jiangsu Province,Inner Mongolia Autonomous Region and Guizhou Province were the three regions with the highest debt risk,and Beijing,Shanxi and Tibet Autonomous Regions were the areas with the lowest risk.According to the scores of the three common factors and risk factors in the sample area,combined with the analysis of factor characteristics,local government debt supervision in various provinces and municipalities has provided opinions and suggestions on solvency,debt dynamic changes,and fiscal debt elasticity.Combining the results of empirical analysis,put forward three policy recommendations for the supervision of local government debt in China.One is to improve the construction of local government debt risk warning management system;the second is to promote the market-oriented transformation of local financing platform companies;third is to relax the control of local government debt and promote the marketization of bond pricing.This paper starts with the actual needs of local government debt supervision and risk warning,and selects data from the existing statistical data of the financial department and the statistics department to construct a local government debt risk warning management system.The data is true and complete,and the early warning results are highly reliable.At the same time,31 provinces,autonomous regions,and municipalities directly under the Central Government are divided into three groups according to the level of economic development.Horizontal comparisons can be made between different provinces,and this comparative method can be applied downward to the grass-roots government to make the risk early warning system more effective.