Research On Financing Problems And Countermeasures Of X County Government In Guizhou Province Under The Background Of Debt Governance

Since 1994,China’s fiscal management system has been formally changed to a tax distribution system.It was revealed that there was a gap between administrative responsibilities and financial power.To specify,financial power has been going upward while administrative responsibilities has been the opposite.In the rapid process of urbanization,a substantial amount of local governments are short of funds,even with transfer payments and tax rebates from the central government.However,the old “Budget Act” stipulates that local governments are not allowed to get into debt,therefore,they have set up platforms for financing gradually.In 2008,the global financial crisis broke out,and the central government carried out a 4 trillion investment project.Accordingly,when the local government implemented it,the local debt stock has risen constantly.In 2010,a few European countries fell into a debt crisis.At the meantime,the central government was aware of the possible risks of local debt.The State Council took the lead in standardizing the governance of local debt,and The Ministry of Finance also made corresponding regulations on this issue.Under this circumstance,the financing channels of local government are getting narrower and narrower.Thus,the financing difficulties of local governments have become an urgent problem to be solved.The current study takes X County in Guizhou Province as an example.As a county-level institution sent by a prefecture-level city,X County has a representative financing model among small and medium-sized cities.More than a decade ago,X County was established to alleviate population and traffic pressure of the old prefecture-level city,with 8 subdistricts and towns under its jurisdiction.Driven by the need for urbanization andimprovement of people’s living standard,X is a fund intensive county.This study aims to identify the problems of its main financing model and propose practical countermeasures and suggestions.From the perspectives of local government debt,debt governance,and local government financing,the theoretical model of this thesis is based on public goods,fiscal decentralization,public choice,and financial risk theory.Furthermore,experience from both domestic cities(Beijing,Shanghai,and Chongqing,etc.)and foreign countries(the United States,Japan,the United Kingdom,and France,etc.)is discussed,in order to better tackle the financing issue of X county.In addition,the author introduces its comprehensive financial situation,fiscal balance,and debt balance.The five main financing modes of X County,including the local financing platform model,bond model,PPP model,industrial fund model,and land financing model are presented with the support of data.Besides,the problems of each model and their causes are further analyzed respectively.To solve the problems above,four suggestions for X county government financing is put forward,1)optimize the financing platform;2)standardize and promote PPP model vigorously;3)expand financing channels of the...