Analysis And Early Warning Management Of Local Government Debt Risk In China

Local government debt risk is one of the main sources of major financial risk in China.In the process of rapid economic development in China,the role of local governments can not be underestimated,and even to some extent,local governments are the backbone force to promote rapid economic growth in China.However,local government debt is a double-edged sword,which can not only promote the development of social economy,but also may bring huge risks to the social and economic system.In the process of urbanization,local governments need a lot of funds for infrastructure construction.However,affected by the tax distribution reform,most local governments cannot make ends meet due to the mismatch of financial power.The accumulation of local government debt becomes a hidden danger as local governments borrow to finance their deficits.In addition,the opaque,diversified and hard-to-count part of implicit debt deserves more attention than explicit debt.This paper studies the local government debt problem from the perspective of risk.The purpose of this study is to establish a comprehensive evaluation index to give early warning of the local government debt risk in China and put forward corresponding reasonable Suggestions.This paper carries out research according to the design idea of "theoretical basis of government debt-composition and current situation of Local government debt in China-debt risk-debt risk cause-debt risk early warning".First of all,this paper combs the relevant theories of government debt,and clarifies the definition and main composition of local government debt.Secondly,on the basis of theory and definition,it introduces the current situation and risk types of local government debt in China.Then,it makes a systematic analysis of the causes of local government debt risk in China from four dimensions: financial relationship,macro-economy,government behavior and supervision and management.Finally,the KMV model in the risk measurement model was used to calculate the expected default rate of debt in 31 provinces,and the entropy method and TOPSIS method were used to establish the comprehensive evaluation index for the early warning analysis of the debt risk of each province,and scientific and reasonable Suggestions were put forward accordingly.