TITLE:
Analysis and Research on Local Government Debt Problems in China
AUTHORS:
Fan Zou
KEYWORDS:
Local Government Debt, Debt Risk, Causes and Countermeasures
JOURNAL NAME:
Modern Economy,
Vol.10 No.1,
January
18,
2019
ABSTRACT: As China is in the process of urbanization, local
governments often assume the responsibility for the construction of most public
facilities, and thus have strong investment needs. Under the current trend of
large and growing local debts in China, local governments in all regions and at
all levels in China have a lot of debt operations and complex debt
relationships. The accumulation of local debts leads to the out-of-control of
the scale of debts, which seriously affects the normal operation of government
agencies and hinders the development of the economy, which is prone to huge
financial risks and social conflicts. In order to control the risk of debt, the
central government began to adopt a series of policies in 2018 to implement
debt limit management for local governments, and the national local government
debt limit was 21 trillion yuan. In this context, this paper starts from the
status quo and problems of local government debt, accurately analyzes the
causes and mechanisms of debt formation, and proposes specific measures and
methods to rationally control debt growth and reduce risks, in order to
strengthen local government debt management and resolve social conflicts. This
article provides guidance advice.