Research On Risk Of X's Local Government Debt During 14^th Five-year Plan Periods

In the 14^th Five-Year Plan period?2021-2025?,China 's per capita GPD will exceed 10,000 US dollars.Local governments in China,at the same time,will face downward economic pressure caused by the disappearance of the demographic dividend and the transformation of the economic structure.The risk of government debt is increasing.Before the implementation of the new "Budget Law",the local government's debt expansion accumulated a large amount of stock debt,which made market concerns.Predicting the debt risk of local governments in advance will reduce default risk.Taking the X,a famous city located in northeast of China,as an example,we discuss the cause,characteristics and risk level of the local government debt by comparative analysis and case study method.Furthermore,we analyze the financial revenue of X city,and apply the time series analysis method to predict the financial revenue and expenditure of X city during the 14^th Five-Year Plan period.Finally,we utilize the KVM model to predict the default probability of X city's normal bonds and specialize bonds respectively.The results of the study show that during the 14^th Five-Year Plan period,City X will usher in a "small peak" in local government debt repayment,when local governments face greater debt risks.The special bond of local government in City X is greatly affected by the income from the transfer of state-owned land,and will face greater default risk than normal bonds.The implementation of the new "Budget Law" only realized the transfer of local government debt risk in time,and the local government debt problem has not been really resolved.In addition,the principle of positive incentive debt limit allocation may prompt local governments to default and raise debts,increasing legal and liquidity risks.Therefore,it is suggested that the center government may consider increasing the debt quota of some regions in due course.