Research On Investment And Financing Of The Government In Dongguan City In Post-government Debt Period

In 2008,the central government instituted a four-trillion-dollar investment plan in tackling the international financial crisis.As the local governments responded positively,the amount of local investment platforms and balance shot up.The expansion of investment and local debt scale,and decrease in investment marginal effect led to the government debt crisis,which may further cause a series of financial crisis.The risk aroused great concern of the central government,thus in2013,it began to conduct reforms in government investment and financing,strengthen the governance of local government investment and financing,successively enact new laws and regulations,such as Budget Law and Suggestions on Strengthening Local Government Debt Management,close down the original financing channels of local governments,and promote the stock debt replacement and the cooperation between government and society.The regulatory government-debts opened up a new path for local government investment and financing,and helped the latter enter post-government debt period.However,after more than four years efforts in dealing with government debt crisis and conducting reform of government investment and financing system,it is found that the new Budget Law and its supporting policies cannot satisfy the urbanization construction of local government and investment demand of stimulating economic growth.Moreover,there are a series of problems of the PPP model,such as trivial cooperation process and insufficient attraction to social capital,which led to its slow advance.The government continuously explores new ways of investment and financing to solve the investment demand.Thus,it becomes an important issue for local governments to solve the problem of investment and financing in post-government debt period.Under the guidance of “theoretical analysis,empirical analysis”,this paper,based on the research background of adjustments to national laws and related policies and regulations of which lead to fundamental changes of the local government investment and financing mode,analyzes government investment and financing and find its inner demand,targets and innovation direction,according to the theory of fiscal decentralization,public product,and incentive compatibility.This paper sets Dongguan city as example,comprehensively analyzes its current dilemma choices in government investment and financing,and offers countermeasures for optimization based on the combination of experience of foreign investment and financing and theory.This paper suggests that China's fiscal decentralization based on the tax-sharing system emphasizes the role of the central government,which leads to the mismatching of government'sfinancial power and authority,thus the local governments' demand of competition and increasing public products cannot be satisfied.However,people's growing needs for a better life ask for higher standards of local governments' supply of public products.At the same time,under the stimulus of economic growth and promotion of officials,local governments are keen to solve financing needs and increase the supply of public products through various investment and financing activities.With the need of stabilizing economic growth and meeting people's need for a better life,Dongguan city is trying to solve current dilemma through government bonds,PPP and other investment and financing activities.However,there are some deficiencies and risks in the development choices of investment and financing activities.Therefore,based on the current dilemma of Dongguan city,this paper puts forward four suggestions: First,make clear the basic principles of government investment and financing,and find the balance between;investments and authority,expenditure and income and project and pattern.Second,improve the financial distribution system,conduct reforms from the aspects of fiscal and taxation systems,bond financing authority and government bond system.Third,make comprehensive use of investment and financing mode,combine actual investment and financing projects,design different systems and apply different models.Fourth,control risks,optimize internal structure,establish risk management mechanism,and strengthen external supervision.This paper is of great importance in deepening the reform of the fiscal and taxation systems,standardizing management of local governments' debt,guarding against financial risks,innovating government investment and financing mode,and mobilizing social participation.At the same time,the study of Dongguan city also can be reference to other local governments.