Discussion On The Credit Risk Control Of City Investmentdebt In China

The history of the development of urban debt investment can be traced back to the tax sharing reform implemented in China in 1994.In order to raise funds for the construction of the new area,the first urban investment bond in Chinese history--pudong new area construction bond came into being.In 1994,China implemented the tax sharing reform,and the financial strength of the central government was enhanced by redividing the fiscal revenue and expenditure between the central government and the local government,while the local government was faced with the mismatch between fiscal revenue and expenditure,and the budget fund was in short supply.In order to solve the problem of capital shortage,inspire strong financing needs of local government,at the same time,due to the budget law regulations,local governments may not issue local government bonds,then under the background of the local government financing platform have sprung up,extremely rich Chinese characteristics for the city of debt and thus into the vast misty rain on the bond market.In 2008,the economic crisis swept the world,China's economy slowed down abruptly,facing unprecedented great test.In response to the economic weakness caused by the economic crisis and the sluggish demand for export trade,the central government promptly launched a 4 trillion yuan investment plan,mainly in railways,highways,infrastructure construction and other areas with large scale and obvious upstream and downstream drivers.According to the government planning,investment in 4 trillion,the central investment accounts for only 1.18 trillion yuan,the remaining 2.82 trillion are driven by local governments and private investment is responsible for,this plan was financial capital has been stretched to strengthen the financing of local government,new loans,issue bonds become the primary choice of local government financing,it also makes the functions of local government financing platform is strengthened,udic issuance number and size also ushered in the golden period.Under the new situation,the central government's overall policy orientation towards urban investment and debt has also changed.Until 2010,the central government had encouraged and supported the formation of local financing platforms and eased the review conditions for urban investment bank bonds.Since 2010,China banking regulatory commission has continuously increased the inventory of local financing platforms and classified different financing platforms.The central government has also strengthened the debt management of urban development investment platform,and the national development and reform commission has tightened the audit of corporate bonds.At this stage,the government showed a tightening attitude towards the financing policies of local financing platforms,but the issuance scale of urban investment bonds continued to show explosive growth.In order to cope with the severe economic situation and make better achievements,key officials of local governments at all levels maintain strong interest and motivation in promoting economic growth and increasing government investment.Issuing urban investment bonds has become an effective way for local governments to circumvent the restrictions of the central government and expand financing.This paper takes the corporate bond issued by Gaoyao State-owned Assets Management Co.,Ltd.,a government financing platform of Gaoyao District,Zhaoqing City,Guangdong Province in 2015,as the case study,from the macroeconomic level to the local government level.The three aspects of the city investment company analyze the credit risk and the actual situation of the bonds,and focus on the financial status and operational capacity of the issuer of the ?15 high-end state-owned bonds?,local financial strength,guarantee credit enhancement measures and debt service.The credit risk prevention measures adopted in four aspects of safeguard measures,through the combination of theory and specific practice,make full use of the analysis method of combining financial indicators with non-financial indicators,and put forward the research conclusions and experience summary for the credit risk control of urban investment bonds.It provides reference and reference for the potential safety hazards brought by the credit risk of urban investment bonds.