Research On Local Government Debt Risk And Preventive Measures

Since the outbreak of the large-scale global financial crisis,in order to ensure the prosperity and stability of the society and promote the sustainable development of the economy,the Chinese government has adopted active policy measures and achieved very good results.For local governments,building infrastructure requires sufficient funds.In order to better promote development,local governments have increased their efforts to increase debt.The emergence and existence of local debtthemselves are of certain positive significance and can help local governments to better develop.After receiving funds,local governments can use them for infrastructure construction and promote local economic development.However,excessive borrowing means high risk,and excessive debt management will also lay down debt risk.After decades of development,local debt scale has become very large in China.According to relevant statistics,the balance of local government debt in 2017 has reached 16.5 trillion yuan.The huge local debt has brought huge debt repayment pressure to local governments,even exceeds the financial capacity of local governments obviously,resulting in huge hidden danger and risk in local debt.If the local debt problem cannot be handled reasonably,it will undoubtedly bury hidden danger to the national and local economic development,and at the same time it will affect the government's credit negatively.Therefore,the large amount of local debt is an urgent issue which needs to be solved.Based on the related concepts and theories of local debts,this thesis analyzes the status quo and risk of local debt in China by combining relevant dataand explores the reasons for the formation of local debt risk in China from the aspects of system,macroeconomic policy and local debt management.It also analyzes the United States that has achieved certain results in local debt management,and draws on the experience of the United States for local debt management to gain corresponding enlightenment,and then gives the solution to the local debt risk in combination with the actual problems of China's local debt risk management..The specific research contents include the following seven chapters: The first chapter introduces the background and significance of the research selected from local debt,and sorts out the methods and ideas of this research design,and summarizes the local debt correlation.The second chapter is the conceptual and theoretical basis,mainly to sort out the relevant concepts of local debt,including the concepts of government debt and classification,local debt risk,etc.The theoretical basis mainly includes financial decentralization,power restriction,new public services,the theory of debt risk management;the third chapter analyzes the local debt risk by collecting local debt data,mainly collecting and tidying the overall data for 2013-2017,local debt data for 2016-2017 and the latest first quarter of 2018.Debt data,so as to better clarify the status quo of China's local debt.On this basis,this thesisconducts an in-depth analysis of local debt risk,including liquidity risk,local area debt repayment risk,lack of specialized management departments,unreasonable use of debt funds,the risk that is concentrated to banks,etc.The fourth chapter mainly analyzes the causes of local debt risk,including the institutional side.Reasons for the system of organization,macroeconomics,local debt management,etc.,following a deeper and detailed analysis of the causes of each aspect.The fifth chapter draws on the experience of the US local debt and draws corresponding enlightenment.The sixth chapter mainly gives the way to solve the local debt risk in China.It hopes to provide some ideas for the settlement of local debt and contribute to China.The settlement of local debt;Chapter VII conclusions and prospects.This thesis has the following conclusions:(1)The local debt problem is very prominent at this stage.In the analysis of the status quo of local debt,it can be seen that the overall debt ratio of China's local debt is very high,while some distant provinces which is economically backward lack sufficient funds to repay debt,resulting in more prominent local debt problems;(2)secondly,the risk of local debt in Chinais high,including huge liquidity risks in a short period of time,insufficient repayment ability of some local governments who haven't gotsufficient funding sources,lack of professional debt and risk management,unreasonable use of debt funds,and the risk in banks due to concentration of debt there;(3)The reasons for the formation of local debt risk are various,and there are certain problems in the system,macroeconomic and local debt management,which leads to local debt risk in China;(4)In the United States the debt management issue has achieved outstanding results is at the local level.Local governments there can rationally use local debt to develop the economy while actively controlling local debt.In this respect,they can provide a lot of experience and reference for the management of local debt in China;(5)Local debt risks need to take active measures to prevent potential risk.This thesis attempts to give advice on local debt prevention from various angles,and hopes to provide some reference ideas for local debt risk prevention.In specific operations and practices,local governments must choose a local debt prevention strategy that suits specific and practical situations at the moment.