Research On Early Warning Of Local Government Debt Risk

The local government debt has played an important role in Chinese economic and social development,accelerating infrastructure development,and improving people's livelihood.The rapid expansion of its scale has attracted the attention and discussion of all sectors of society.After passing through a series of debt management reforms,Chinese local government debt is still at an overall controllable stage.However,in the context of the “new normal”,the problem of debt risk in some regions,especially in underdeveloped regions such as Southwestern China,has become more prominent.How to evaluate the debt risk of local governments more reasonably and establish a debt early warning mechanism has become a hot topic of academic research.Based on the theoretical basis of local government debt and risk,this paper defined the local government debt and briefly introduced the conditions for the outbreak of the risk.Then,through the analysis of the economic development and the status quo of comprehensive financial resources in the southwest region,the status quo of debt in Southwest China was described.Finally,the debt limit management was analyzed and the significance of early warning research was drew.The result of the analysis points the direction for follow-up research.In the empirical part,this paper combined the spirit of documents such as the“Local Government Debt Risk Emergency Disposal Plan”(Guoban Hanban [2016]No.88)and the deadline characteristics of local government debt on the basis of a comprehensive predecessor's research ideas,and adopted a threshold setting.The established Black-Cox first-time model assessed the situation of debt risk in Southwest China in 2018 and 2019-2021,respectively.Specifically,this paper first constructed a guarantee rate index that was practical and economically significant.Second,it predicted the regional GDP and comprehensive financial resources of 31 provinces,municipalities,and autonomous regions across the country,and drew up the debt risk indicators and guarantee rate indicators for all provinces and cities in thecountry in 2018.Based on this analysis,the debt risk in Southwest China was analyzed.Finally,the scale of debt in the Southwest after 2018 was evaluated through the obtained guarantee rate index.Through analysis,this paper drew the following main conclusions: 1.In 2018,the overall debt risk level in the southwest was lower than the warning line,but it was much higher than the national average,while compared with the Northeast,its debt risk situation was more optimistic,due to the good economic outlook of the Southwest.2.The differences in debt risk between the provinces in the southwestern region were relatively large,among which the debt risk in Guizhou and Yunnan provinces were relatively high.3.Between 2019 and 2021,compared with other provinces in the southwest,Chongqing has a larger space for issuing bonds.