Analysis On The Measurement Of Local Government Debt Risk In China

This thesis mainly studies the current local government debt risk in China.Since the reform and opening up,although China's economy has developed rapidly,local governments in China have left a large number of debt problems due to the mismatch between their fiscal power and construction tasks caused by the fiscal system,as well as the imperfection and immaturity in finance,supervision and other aspects.Especially in recent years,with China's economic growth slowing down,the risk of local government debt growth rapidly,this problem has also begun to get more and more attention from all sectors of society.The national audit office organized the audit of local government debts in 2011 and 2013 respectively.According to its announcement,the total amount of direct and indirect debts of local governments in 2013 was about 17.9 trillion yuan.According to the ministry of finance,by the end of 2016,the direct debts of local governments in China were 17.2 trillion yuan.As of the end of October 2018,the country's outstanding direct debt of local governments stood at 18.4 trillion yuan.In addition to direct debt,local governments also have a lot of hidden debt.According to the calculation of researchers from various institutions,China's current hidden debt scale is about 30 trillion yuan,far more than the financial capacity of all regions.In this context,it is particularly important to estimate the debt risk of local governments.This paper tries to make a scientific and systematic analysis of the local government debt risk by combining the research method of theory and demonstration,summarizing the previous literature,combing relevant theories,analyzing the public financial data,constructing the mathematical model and other means,and put forward suggestions to alleviate the local government debt risk in China.There are two main innovations in this paper.First,the paper fully considers the different economic development status of each province,and discusses the different debt risks of each province.The second is to measure the local government debt risk respectively from the actual data and calculation data,and compare the results of the two to get the most objective and rigorous conclusion.Specifically,this paper can be divided into the following five parts: the first part is the introduction,which mainly introduces the structure,research background and significance of the paper,and summarizes the previous research results through literature review.The second part mainly expounds the relevant theories of local government debt risk.This part mainly analyzes the definition and causes of local government debt and debt risk,and summarizes the current mainstream measurement standards of debt risk.The third part mainly describes the development and current situation of local government debt risk in China.This part studies the development process of local government debt in China from the founding of new China to now.Combined with relevant public data reports,it makes an intuitive estimation of the current local government debt risk in China.The fourth part constructs the KMV model of debt risk assessment.Based on the fiscal data of provincial governments from 2008 to 2018,this part conducts an empirical study on debt risk and explains the empirical results.The last part is a summary and policy recommendations,this part of the paper as a whole,and from various aspects to reduce the risk of government debt solutions and Suggestions.The main conclusion of this paper is: at present,most local governments in our country are facing the situation of severe debt structure,huge debt scale and insufficient debt paying ability,and there is a great debt pressure generally.Local government debt risk is closely related to its economic development level.Provinces with medium economic level and high development demand will face greater debt risk.Most provinces can bear the debt threshold of 80% of the annual disposable fiscal income,the annual maximum debt should not exceed 85% of the disposable fiscal income.Considering hidden debts and other problems,the actual debt risks faced by local governments are relatively severe,but the overall debt risks are still controllable.