Research On The Transformation Path Of Local Government Financing Platforms

Local government debt has always been a hot issue in fiscal research in recent years,and the local government financing platform is the largest borrower of local government debt.Although the city investment debt has been stripped from local government debt,it has a lot of problems,and the problems still requires a long process to digest and solve.According to wind statistics,until March 2019,there were 11,567 local government financing platform companies in China,with a bond issue of more than 2.5 trillion yuan.Before 2008,the scale of the issuance of urban investment bonds has been small.After the 2008 financial crisis,the global economy was in a depression.The government proposed a4 trillion stimulus plan to slow down the global economic recession and ensure the stable development of the domestic economy,the number of local government financing platforms and the scale of financing suddenly increased,and quickly reached a historical high.Nowadays,with the approaching period of repayment of a large number of urban investment bonds,and from the beginning of 2019 to March 2019,there have been debt defaults of more than a dozen city investment companies,which has attracted the attention of the market and the government.How to avoid the systemic risks of tens of thousands of city investment companies with a total debt of 2.5 trillion yuan,scientific and rational transformation to better improve people's livelihood and promote economic development has become an urgent problem to be solved.This paper is based on this,adopts problem-oriented research ideas,takes local government financing platform as the research object,and combines the methods of literature analysis,theoretical research,case analysis and other methods,and combines public product theory,the theory of fiscal decentralization,the theory of late-comer advantage,the theory of government competition and the theory of path dependence to study the theoretical part of the thesis.Next,this article introduces the basic situation of the local government financing platform,including the reasons,the development stage and its positive significance.Then itanalyzes the background of the transformation of local government financing platform,including its problems and relevant policy documents issued by the state,and then puts forward the necessity of its change and transformation.Subsequently,several transformation paths of the financing platform were introduced.Combined with the external obstacles and internal difficulties of the financing platform in the transformation,it was concluded that the transformation to the diversified business entities of the new type of city is currently applicable to the transformation of most financing platforms.Finally,this paper verifies the above transformation path by expounding the successful transformation of SHANGHAI CHENGTOU GROUP CORPORATION and JA INVESTMENT HOLDING GROUP,and summarizes the experiences of them,at the same time comes up with policy suggestions.The transformation of local government financing platforms can't be achieved overnight,and successful transformation is not a one-off event.Because many platforms have assumed the function of local government financing in the early stage of development,the projects they undertake can't be completely operated by their own cash flow.Therefore,it is indeed difficult to require the financing platform to achieve market transformation in the short term.However,under the background of the transformation of government functions and the reform of the fiscal and taxation system,the transformation of local government financing platforms is imperative,and the direction of market-oriented transformation will not change.