The Study On Moderate Scale Of Government Debt In Liaoning Province

The current global debt scale is at an all-time high,and the rapid increase in the size of public debt has played a key role in the global debt surge.At present,China's economy is more massive,its economic structure is more complicated,its economic ties with countries are closer,and uncertainties in economic operations have increased,and it has entered a risk society.Preventing and mitigating major risks is also the top priority of the three major battles identified in the 2017 Central Economic Work Conference.The focus is on preventing and controlling systemic financial risks.Local government debt is linked to the government and financial markets,which is related to systemic economic and financial stability.The KMV model is a important debt risk measurement model.Therefore,based on the KMV model,it is of great practical significance to explore the scale of government debt from the perspective of risk control.During the period when the economy entered a new normal state and the economic growth rate was shifted,the growth rate of GDP and fiscal revenue of Liaoning Province,which was dominated by heavy industry and large state-owned enterprises,fell sharply.However,the proportion of general public services,education expenditure,medical and health care,social security and employment in Liaoning's fiscal expenditures continued to rise,the structure of fiscal expenditures solidified,and the contradiction between fiscal revenues and expenditures intensified.In 2015,the 10-year special bond issue rate of Liaoning Province was higher than the issue limit,which was the first time since the issuance of local bonds.In addition to the economic data fraud in the previous period,the sustainability of the current government debt scale in Liaoning Province has attracted the attention of all parties.Therefore,from the perspective of default risk control,it is particularly important to explore the appropriate scale of government debt by taking the latest data after “squeezing water” as a sample.Based on the theoretical analysis and the introduction of key concepts,this paper analyzes the economic profile of Liaoning Province from the perspectives of economic growth,industrial structure and population aging.It analyzes the financial situation of Liaoning Province from both financial revenue and fiscal expenditure.Based on the analysis of fundamentals,this paper analyzes the sustainability of current government debt in Liaoning Province by combining the types of debt claims,hierarchical distribution and maturity of debt maturity in Liaoning Province.Qualitative research found that Liaoning Province currently has a small risk of default on government debt,and its risk is mainly due to macroeconomics,large fluctuations in fiscal revenue,and rigid fiscal expenditures,and the fiscal expenditure structure is solidified.On the basis of qualitative analysis,based on the revised KMV model,from the perspective of risk control,empirically explore the appropriate scale of government debt in Liaoning Province.Combined with the actual reform of the tax-sharing system in 1994,this paper selects the data from 1994 to 2018 as a sample.On the basis of controlling the probability of default,considering the multiple factors such as GDP,fiscal revenue and its volatility,and the proportion of rigid fiscal expenditure,the empirical calculation of the appropriate scale of debt in Liaoning Province is carried out.The empirical results show that under the premise of the probability of default of 0.42%,the appropriate scale of government debt in 2019 is about 70 billion to 120 billion;the appropriate scale of government debt in 2020 is about 80 billion to 130 billion;the moderate scale of government debt in 2021.It is about 90 billion to 140 billion.The results show that the current government debt default risk in Liaoning Province is generally small,but when the proportion of debt-to-debt fiscal income is 35%,that is,when the rigid fiscal expenditure accounts for 65%,it exceeds the probability of safe default;Liaoning Province's fiscal expenditure The proportion of rigid expenditure is high,and the structure of fiscal expenditure is solidified.Based on qualitative and quantitative research,the paper proposes: First,stabilize the macro economy and smooth fiscal revenue.Second,improve budget management,reform transfer payments,and break the structural solidification of fiscal expenditures.Third,improve the marketization level of local bond issuance pricing and build a basic system for local debt.