Study On Credit Risk Status And Early Warning Of Urban Investment Bonds In China

With the continuous advancement of tax distribution reform,the financial and administrative powers of the central government and local governments are gradually separated.Local governments are faced with the gap pressure of more local infrastructure construction expenditure and less fiscal revenue.Under this pressure,local governments set up urban investment companies one after another to bypass the restrictions on local governments'debt issuance imposed by the old budget law.From the issuance of the first urban investment bonds in Shanghai in 1993,to the rapid development under the "4 trillion economic stimulus plan" in 2008,to the repayment peak in 2019,the credit risk rating of urban investment bonds has been continuously improved.This paper analyzed the credit risk characteristics of urban investment bonds in China from the evolution process and current development situation,designed the credit risk evaluation and early warning system,and selects the default cases of urban investment bonds for application and verification.The main conclusions of this paper are as follows:first,with the introduction of relevant policies,the credit risk of urban investment bonds is aggravated due to the gradual stripping of government credit and the influence of the repayment peak.Second,the overall credit risk of urban investment bonds in China is still controllable,but the credit risk of urban investment bonds brought by the liquidity of urban investment companies is increasing gradually.Thirdly,the construction and early warning analysis of the credit risk assessment of urban investment bonds should be carried out from the perspectives of regional economic development,local government financial risks and local investment and financing platforms themselves,and the corresponding indicators should be selected.Fourth,through the analysis of the default event of urban construction investment bonds and the eight urban construction investment bonds issued at the end of 2018,the main early-warning indicators are related indicators in terms of company liquidity,profitability and cash flow.Based on the analysis of this paper,the successful experience of foreign countries can be learned from the information disclosure system,guarantee system and credit rating system.