Research On Default Risk Of Local Government Debt In China

In recent years,with the increase in the cost of social and economic development at this stage,the scale of local government debt has expanded dramatically,and local government debt risks have become increasingly prominent.In 2013,the United States Detroit City officially filed for bankruptcy due to insolvency,which sounded the alarm for the local government of large-scale debt.If the debt problem is not handled properly,it may evolve into a debt crisis and even affect the operation of the entire macro economy and society.stable.How to resolve the local government debt risk is a hot issue that is of widespread concern to all sectors of society,and it has become a difficult problem for governments at all levels.This paper takes the government debt risk of Nine provinces of Pan-RRD as the research object,and compares the debts of the nine provinces from the perspective of regional development and cooperation.The Nine provinces of Pan-RRD span the eastern,central and western regions.From the perspective of economic development,they are divided into three gradients.To a certain extent,they represent the three levels of economic development in various regions of China.Therefore,the local government of the Nine provinces of Pan-RRD The assessment of debt risk can be used as a thumbnail of the national local government debt risk situation,which provides a reference for the assessment and prevention of local government debt risk.This paper analyzes the current situation of government debt in the Nine provinces of Pan-RRD and points out the reasons for the expansion of debt size and structure,such as the imperfect fiscal system,the imperfect regulatory system,and the irrationality of the official promotion system.At the same time,Eviews,SPSS and other software were used to collect data from nine provinces from 1997 to 2017.The KMV model was used to predict the default risk of local government debt in 2018 and 2019 under the 40% repayment ratio.Based on the calculation results,we conclude that between 2018 and 2019,the local government debt risk of the Nine provinces of Pan-RRD is generally controlled,and the security scale of local government debt should be less than 80% of the local government's repayable income.At the same time,when the size of debt in some regions exceeds the safe scale of local government debt,the risk of default will increase rapidly,and there is a certain risk of default.Therefore,this paper proposes countermeasures to reduce the risk of debt default in the Nine provinces of Pan-RRD by strictly controlling implicit debts and contingent liabilities,promoting asset securitization of financing platforms,steadily promoting PPP mode and strengthening regional cooperation.