Terminalcables

On October 24, 2011. China's ministry of finance in Shanghai, zhejiang province, approved last week in guangdong province, shenzhen local government 'translated by "pilot. Translated by refers to the province (city) pilot in the approval of the state council translated within the limit of the scale, issue their own organizations in the province (city) government bond debt issuing mechanism.

Pilot provisions of these measures, 2011 pilot province (city) government bonds issued by the ministry of finance for servicing. Pilot province (city) issue of the government bonds for JiZhangShi fixed rate FuXi bonds, time limit for 3 years circulation structure bonds and five years bonds accounted for the approval of the state council of the circulation of the size of the translated 50%, using a single interest rate debt issuing pricing mechanism sure bond issue interest rates.

Local government bonds in China is not new things. At the end of the 1980 s to 90 s, the Chinese many local governments to raise money bridge road, once a local issue bonds, including local enterprise bonds. But by 1993, the behavior of the stop under the state council, the MLB hats central government bond issue became the JinLuan, its reason lies in the central doubt the ability of local debt to cash. Also in that same year, the central government started to implement expansion of fiscal revenue to GDP, and the proportion to the central focus on financial income as sign tax-distribution financial system reform. The 1994 budget law further make clear a regulation, unless the law and unless otherwise specified by the state council, local governments may not issue local government bonds.

In 2009, the central government began and the local government issued local government bonds. The s hair index for 200 billion yuan. As the background for the global financial crisis, the Chinese government decided to spend four trillion yuan to the economic stimulus package. The local government had already mounting debt, the central still not trust local government debt paying ability, but have to allow the local government investment and financing platform high-speed operation of the company, at the same time, helping to open small mouth, was NiuDao, allow issuing. Although undertakes by the local government does not involve real to issue local government bonds, after all is in that direction march of the development step.

< br / > obviously, the local government translated by pilot, more than 2009 years to do STH for sb the pilot and translated more took one step, complied with the requirements of the local government for many years. Issued by the local government bonds just in the approval of the state council is less than 50% of the scale of the translated, this is normal also, as some leverage can through bank loans to the construction unit to approach and default payment of the way. But, the approval of the state council of the total scale translated is actually a invalid goal, because the local government debt actually will often more than the limited scale translated scale. They can be more than a limited amount of debt issuing debt limit, especially by the company of affiliation, land rolling development projects or other project engineering debt, not necessarily through the formal financial institutions loans or folk lending, also can be the dominant and recessive guarantee, also can be engineering arrears.

On the whole, the pilot of the steps is not big, the scope is too narrow. Shanghai, zhejiang, guangzhou and shenzhen are in developed regions. Originally can completely in all provinces and cities trial opened. And should the underdeveloped region also into come in. In less developed areas the necessity of the implementation of the pilot, no less than in developed regions.

In addition, the social from all walks of life for a long time where the transparency of government debt concerns. But, by the local government debt issuing itself, can only solve itself issued some bonds transparency problem, local government Wholesale New Era Hats other liabilities transparency problem not touched and solve. This year China the national audit office announced the end of 2010, China local government debt of the total scale to 10 trillion yuan. This is still a very conservative Numbers, a large number of or liabilities is not counted.

The central government's top-down control to realize the transparency of the local government debt. To really realize the place the transparency of government debt, they need to place the democratic procedures to local government debt monitoring and restraint. A at least requirement is local governments have to follow all the caliber budget, all debt payments should be integrated into the diameter to all of the budget, and must be approved by the place National People's Congress for approval. Whether local tax income, or debts revenue, all needed by the place National People's Congress set a limit.

Finally, the place National People's Congress's representative, also must through the real campaign produces, really able to represent public opinion, has prompted the government to take responsibility, ensure the expenses of tax jurisdiction for the citizens of the public service needs. But, the establishment of China's local fiscal democracy program is still a long way to go, there is little hope, I cannot see the end of the road.