Research On China's Local Government Hidden Debt And Its Risk Management

The 19 th National Congress of the People's Republic of China has taken the prevention and resolution of major risks as one of the three major battles,and the hidden debt risks of local governments have been highly valued as key prevention and control targets.In recent years,the central government has successively promulgated a number of policies and regulations to regulate financing,and has continuously regulated the methods of investment and financing,but the hidden debt risk of local governments has not been eliminated.Due to the low transparency of local government debt and the widespread use of illegal borrowing in the long term,the hidden debt of local governments has surged and it is difficult to measure and prevent them.Local government debt is often related to the improvement of local infrastructure and people's livelihood.It is necessary to clarify the causes and risks of hidden debts of local governments,curb the increase of hidden debts,and effectively manage and control the hidden debt risks of local governments.Based on the research results of scholars at home and abroad and combing the relevant theories of hidden debt of local governments,this paper first analyzes the current situation and causes of hidden debt of local governments in China,and finds that the forms of hidden debt of local governments are diversified,and the scale of debt is large.Since 2014,the trend has been expanding year by year.The formation of hidden debt of local governments is caused by the combined effects of fiscal system factors,internal drivers of fiscal expansion,and external financing environment factors.Secondly,an empirical method was used to test the influencing factors of local government's hidden debt.Through panel regression,it was found that fiscal decentralization,local government's investment enthusiasm,local government's financial strength and local government's hidden debt scale were significantly positively correlated.Then,the hidden debt risk of local government was measured.The results showed that the hidden debt of local government in our country had risks.The types and characteristics of hidden debt risk of local government and the transmission path to financial and fiscal risk were analyzed.The hidden debt risk of local governments may cause harm to China's finance,finance and economy.Finally,from the aspects of improving local government financial system,standardizing local government financing model,establishing local government implicit debt risk early warning mechanism and improving local government implicit debt risk management system,etc.,put forward countermeasures and suggestions to effectively control local government implicit debt risk.