| “Budget Law of the People’s Republic of China”had been enacted on January1,2015.The law had allowed local governments to issue bonds,The law had given local governments the power to borrow.The law had regulated the manner,use,repayment and supervision of debt.“Budget Law”had been enacted by China on 29 December 2018,The law had insistsed on allow local governments to borrow money.It states that Artical 14.Artica 35.Artica 48.Artica 94.I have studied the history and current situation of local government bond issuance in China.There are credit risk,liquidity risk,rating risk and moral hazard in the process of issuing bonds by local governments,China’s local government bonds have gone through a tortuous process.This article introduces the theory,concept,history and current situation of local government bonds,This article examines the financial risks of municipal bonds in the United States,I suggest that China follow the American’s example.First,I introduces the theory and concept of local government debt.There are four theories that The Theory of Public Goods,The Theory of Fiscal Federalism,The Theory of Public Spending,and The Theory of The Golden Rule.These theories provide a basis for local governments to issue bonds.I introduced four concepts that Creditor’s rights,Bonds,Local Government Bonds,Urban Investment Bonds,and Municipal Bonds.Through introductions,the writer’s block was removed.second,I introduces the history and current situation of local government bonds in China.I introduces the advanced experience of American municipal bond issue.China should learn from the advanced experience of the United States,I’m trying to find a way that works for China.And finally,I introduces the financial risk of local government bond issue in China,I gave some legal advice.The financial risks of Chinese local government bonds include credit risk,liquidity risk,rating risk and moral risk.I studied the characteristics of these risks.Then,I combined the Chinese reality,I introduc some legal advice for the risks.Financial risk is hard to predict,Therefore,only by changing itself in the process of development can China defuse the risk of local government borrowing. |
