Research on the path of transformation and development of local government financing platforms and international experience

Qiuyu Zha

doi:10.47297/wspceWSP2516-251901.20240802

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Research on the path of transformation and development of local government financing platforms and international experience

Volume 8, Issue 2

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Research on the path of transformation and development of local government financing platforms and international experience
Yunnan University of Finance and Economics
Vol. 8, Issue 2, Pages: 5-17(2024)
Published： 29 August 2024 ，
DOI：10.47297/wspceWSP2516-251901.20240802
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Zha Qiuyu.Research on the path of transformation and development of local government financing platforms and international experience[J].Creative Economy,2024,08(02):5-17.
DOI：

Zha Qiuyu.Research on the path of transformation and development of local government financing platforms and international experience[J].Creative Economy,2024,08(02):5-17. DOI： 10.47297/wspceWSP2516-251901.20240802.

摘要

Abstract

Local government financing platform refers to a kind of investment and financing institution with special attributes established by local governments in China to raise funds to achieve their policy objectives

especially infrastructure construction and urbanization process. These platforms raise funds mainly by issuing bonds

obtaining bank loans and selling assets and so on

because The investment needs of local governments often exceed their fiscal revenue. And they use the funds to finance local government projects. This requires a specialized institution to operate these financial activities

namely local government financing vehicle. The operational capability

credit rating and adaptability to the policy environment of these platforms directly affect the financing efficiency and financing cost of local government. Local government financing vehicles also assume the functions of project management and financial management. They need to screen

evaluate and monitor the investment projects of local governments to ensure the rational use of funds and the good effect of investment. At the same time

they also need to carry out financial reporting

risk management and other work to ensure the platform run smoothly. However

LGFVS also face problems. For example

since the financing activities of the platform are ultimately endorsed by local governments

this may raise the issue of moral hazard

that is

the platform may be inclined to make riskier investments. In addition

the transparency of information such as the operation model and financial status of local government financing vehicles is low

which may affect the market's judgment of their credit. All these problems need our attention and research to promote the healthy development of local government financing platforms.

关键词

Keywords

Local government financingInternational empirical studyTransformation development path

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