Research On The Implicit Debt Risk Of Local Government And Its Solution

The year 2020 is the end of a well-off society.However,the complicated situation at home and abroad has put new downward pressure on China's economic operation.Against the background of the new normal economy,macro policies will be formulated around the three key themes of stable growth,structural adjustment,and risk prevention.As the main force for the implementation of macro-policy,local governments' decision-making rationality directly determines the effectiveness of governance,while some local governments adhere to the growth rate of GDP and blindly stimulate the economy through debt investment,especially various investment and financing platforms as local government agents Investment and financing.Along with the increase in the scale of financing platform assets and the smooth progress of infrastructure projects,it has also led to the continuous accumulation of local government debt risks.The 2019 government work report emphasizes “balancing the relationship between stable growth and risk prevention”,and the prevention and resolution of implicit debt risks has become a key task of the central government and local governments.This article starts from the use of literature research methods,case analysis methods,etc.,starting from the concept of local governments' implicit debt,combined with various norms and policies issued in recent years to resolve government debt,to further clarify the boundaries of implicit debt and try to explore its scale and derivative process.Combining the theory of government competition and the theory of government function transformation,it analyzes the internal and external causes of the formation of implicit debt.It is concluded that the mismatch of financial power caused by the reform of tax-sharing system,abnormal local government competition and misplacement of local government functions are the internal main reasons for the implicit debt surge.Financial institutions are superstitious about the government,and improper innovation is an external factor driving the spread of implicit debt risks.Basedon this,through analysis of non-standard default cases of urban investment since 2018 and successful examples of urban investment marketization in Wuxi,Suzhou,this paper proposes countermeasures to prevent and resolve implicit debts,From the perspectives of fiscal and taxation system reform,government function transformation,urban investment platform.