Case Study On The Default Of Cooperation Project Between Government And Zhongjiang Trust Company

In the context of continuous urbanization and mounting downward pressure on economic growth,huge investment in livelihood projects and infrastructure construction has stimulated strong demand for funds from local governments.However,in recent years,the government and bank financing cooperation regulated by the China banking regulatory commission are becoming tighter and tighter.Therefore,the government and trust company financing cooperation quickly become one of the new financing channels in local government,this cooperative model meets the financing needs of the people's livelihood construction of the government,and to a certain extent,guarantees the stable development of the trust industry.In recent years,the cooperation projects between governments and trust companies are becoming tighter and tighter,and also create more deeply thinking problems in a short period of rapid development.In the September of 2018,the first capital city of the cooperation project between government and trust company broke a contract and caused the extensive concern of the trust industry.In order to reduce the occurrence of such items effectively,we should give enough attention to the cooperation projects between governments and trust companies.This article selects the actual case named Zhong Jiang golden horse 430 trust project as a typical research object of default project.Through analyzing,and then find out the reasons of default and identify specific risk factors,finally put forward corresponding suggestions on the basis of the research results.The research results show that the project's default reason from the external environment factors are:declining macro-economic,changing policy environment,more local government debt and local financing vehicles borrowed illegally.From the perspective of the trust project management,reasons are:difficult asset recovery,not perfect credit,inadequate internal management of the company,oversight of the due diligence and audit,incomplete project internal control,this above will give impact on default finally.Because the golden horse 430 project has been in the stage of substantial default,in order to protect investors and stakeholders and minimize the losses,I put forward relevant suggestions,which solve liquidity problems,negotiate to compensation,replace and buy the trust rights of investors and get the policy support of government departments Finally,the following inspirations are:take necessary credit measures,improve internal management,implement the project dynamic monitoring mechanism,strengthen the project feasibility study,improve the due diligence and audit,control the scale of hidden debts of local governments,standardize the development of local financing platforms,perfect the trust-related legal system and abandon the rigid payment idea.