Research On The Transformation And Development Of Local Government Financing Platform Illustrated By Z Investment Group

With the gradual strengthening of China’s economic strength and the acceleration of urbanization,the demand for infrastructure construction in various places has increased,and local infrastructure has been further improved.With the increasing demand,the scale of China’s public infrastructure construction continues to expand.If all the construction investment is borne by the government,the local financial pressure will be overwhelmed,and the local government financing platform is developing rapidly at this stage.With the rapid development of local government financing platform,some drawbacks are gradually emerging,the most obvious one is the financing transformation.Local government financing platform promotes the development of local economy and provides financial support for infrastructure construction.However,due to its excessive development and blind and reckless financing mode,local government financing platform is heavily in debt.It is difficult to sustain the financing mode without government endorsement,and the transformation and development are facing difficulties.This paper takes Z Group as the research object,adopts the methods of literature research,case analysis and investigation and interview,collects the relevant literature on the financing transformation and development of local government financing platform,defines the concepts of government financing platform,local government debt and financing transformation,and applies the public goods theory,fiscal decentralization theory,market failure theory and golden rule theory to interview the relevant management and financial personnel of the group.Obtaining data from the banks in the group,business dealings and relevant regulatory authorities,on-the-spot investigation of Z Group’s financing status and operation shows that there are four problems,namely,no distinction between government and enterprises,chaotic financing management,inefficient existing financing methods,excessive dependence of financing channels on banks,and improvement of subsequent financing capacity.Then,the causes are analyzed from both internal and external aspects.Through theoretical research and on-the-spot investigation,this paper analyzes the necessity of financing transformation from three aspects: local government,financial institutions and internal demand of the group,analyzes the conditions of financing transformation from three aspects: national policy,group operation and industry development trend,and puts forward the transformation goals and strategies of market-oriented transformation,improving asset quality and enhancing comprehensive financing ability.Finally,some suggestions and measures are put forward,such as separating government from enterprise,reorganizing the relationship with local governments,developing comprehensive business,perfecting existing financing methods,changing financing concepts,broadening financing channels,adjusting management structure,and improving subsequent financing capacity.Through the research of this paper,I hope that Z Group can successfully carry out the financing transformation,and also hope to provide some ideas and help for the financing transformation of government financing platforms in other parts of China.