Analysis Of The Solvency Of Local Government Bonds In China

In the current economic situation,the issue of local government debt in our country is very prominent.Due to the speeding up of economic development and urbanization,local governments urgently need the injection of external funds,while the central government can not give strong support to these provinces.Although local governments issued bonds to raise funds before 2009 was an illegal act,but in order to speed up the pace of industrialization and urbanization,many local governments took risks and privately borrowed large amounts of debt through various channels.Far more than it can afford,more and more problems are caused,and the debt problem of local governments is very significant.Since 2009,China has been steadily stabilizing itself and slowly relaxed its control over this area.It has conducted three policy adjustments in succession:the"generation by generation" and the "generation by generation" and "spontaneous self-reparations".After the experiment is feasible,It is implemented throughout the country so that local government bonds will not take shape until 2015.This kind of bond issuance by the local governments makes the fund-raising channels of the government more transparent and helps to push the local economy to a higher level and to minimize the pressure on local governments.Nowadays,the way of raising funds by local governments issuing bonds has gradually become the mainstream,and the scale is bigger and bigger,and the reliability of bonds is also getting higher and higher.On the basis of the situation of local government issuance and payment of bonds in 2015,the author based on the situation of the issuance and payment of bonds in China,based on the situation of the issuance of local government bonds in 2015,using the reference of the national economy,the national financial index and the investment in fixed assets.Indicators and other 11 indicators are used to model the local government solvency of 30 local governments issuing local government bonds.The 3 principal components are extracted by the method of component analysis,the ability of debt service,the ability to repay the debt and the ability to pay the debt at sight,and the main component score function model is designed by the regression analysis method.Finally,the score of the principal component factors and the comprehensive solvency situation of the provinces and cities are obtained.It also puts forward some policy recommendations for the continuous issuance and health payment of government bonds in China.Finally,this paper puts forward some suggestions on two aspects of the mechanism guarantee and system guarantee of local government bonds,hoping to establish and improve the relevant mechanism to promote the healthy and orderly development of the bond market in China.