Research On The System Of Issuing Local Government Bonds In China

After the outbreak of the international financial crisis in 2008,the number of Local Government Financing Platform Company in China increased dramatically.While Local Government Financing Platform Company provided a large amount of construction funds for local governments,they have also accumulated huge amounts of local government debt.In order to hedge local government debt risks and promote the standardization of Local Government Debt financing behavior,China revised the Budget Law to allow local governments to issue local debt in 2014.Subsequently,the State Council and its subordinate departments issued a series of documents to make specific provisions on the issuance,use and repayment of local bonds.The local government bond issuance system defined in this paper is a series of institutional arrangements and management regulations stipulated by the state for local governments to issue bonds directly for financing.Local government bond issuance system involves the issuing subject,the determination of debt limit,the way of raising,credit rating,information disclosure,pricing mechanism,secondary market trading and settlement mechanism,the use of raised funds,bond repayment of principal and interest,etc.and so on.Firstly,this paper expounds the background and significance of the study of local debt.Secondly,it summarizes the research situation of domestic and foreign local debts.Developed countries have conducted in-depth research on local debt and published a large number of research results;Chinese scholars have also conducted a comprehensive study of the local debt issuance system,these research results have reference significance for improving the local debt issuance system and other aspects.Thirdly,it elaborates the related concepts of local debt,the theoretical basis of the existence of local debt and the necessity of improving the local debt issuance system.The establishment and improvement of the local debt system can not only standardize the local government's debt-raising behavior,prevent financial risks,but also promote the local economic development.Fourthly,this paper makes a detailed analysis of the current situation and problems of the local government bond market in China,and points out that there are many problems in the issuance of local government bonds in China,such as the low market-oriented level of local bond issuance pricing,poor liquidity in the secondary trading market,imperfect laws and regulations,imperfect information disclosure mechanism,and excessive bank holdings.If these problems can't be properly solved,it is not conducive to the long-term development of local government bond market and the prevention of local debt risk.In the part of introducing international experience,this article first analyses and studies the local bond issuance systems of the United States,Japan and France.There into,the United States was the first country to issue municipal bonds,with consummate information disclosure and credit system.The issuance of municipal bonds was decided by local governments according to the needs of local economic development;the issuance of local bonds in Japan was changed from examination and approval system to agreement system,in addition,improved the relevant system regulations;the supervision system of local bonds in France was strict,and the central government did not assume sole responsibility.Finally,this paper puts forward the corresponding policy suggestions,that issuing local debt needs to improve the market-oriented issuing methods,reduce the interference of non-market factors;promote the diversification of local debt investors and diversify investment risks;establish a local debt declaration mechanism,enhance the liquidity of local debt in the secondary market,and promote the development of local debt market;in improving the local debt supervision system,we should make full use of it;to play the role of information disclosure,credit rating system and risk early warning mechanism;to strengthen the budget constraints of local governments and prevent local government moral hazard;to introduce performance evaluation mechanism to evaluate the use effect of local debt,as an important basis for adjusting the scale of local government debt,thus promoting local governments to improve the efficiency of the use of local debt funds.