Over the allocation of land and other assets

 Over the allocation of land and other assets, the formation of one or more assets and financing cash flow can reach the standard of Urban Construction Investment Company, Urban Development Corporation, Urban asset management companies and other types of companies to finance the government in the name of security, and necessary to finance repayment of subsidies and other commitments as a carrier. Although all levels of government financing vary but will eventually put the funds into the municipal building, public utilities and other projects. Municipal and public utilities in the investment of funds in the financial allocations to local governments, land allocation, transfer and other forms of equity investment, the rest mainly from fund-raising platform for government financing of loans.

a local government financing platform Loan: must be highly concerned about the economic phenomenon

(a) loans to local government financing platform in large quantities, an increase of speed. The number of platforms a lot of local government financing, statistics show, there were various levels of local government financing platform for more than 8,000. Secondly, local government finance loans to the large number of platforms, 2009, the RMB loans increased 9.59 trillion yuan each; non-financial companies and other sector loans increased 7.14 trillion yuan, of which short-term loans increased 1.38 trillion yuan, increased long-term loans 5 trillion yuan; as the main means of financing local governments rely on bank loans, where the majority of long-term loans to invest in local financing platform, which total nearly 3.8 trillion yuan loans, local government financing platform for the proportion of loans accounted for the increase in bank loans, accounting for new than about 40% of total loans. Project finance loans in local government loans accounted for the majority, the proportion of total loans and financing platform for more than 80% of the loan balance of the project nearly 5 trillion yuan.

(b) the risk of progressive local government financing platform highlights. Local government financing platform for promoting economic development played a positive role, but with the financing of the expansion, the rapid growth of total loans, the risk has been showing.

First,bailey UGG boots, the Government credit risk. Financing by the Government to establish platform for the main economic activities in the relevant departments of government or head of government as the basis for financing the credit, which is followed by the debt by the Government's financial responsibility. However, the huge accumulation of such financing platform enables the scale of Government finance the implicit debt burden is too heavy, or even completely out of the actual financial capacity, financial problems strand breaks can occur at any time. Platform based on the number of local government financing and the financing scale soaring, local government debt burden to the county and township level in terms of investment and financing platform for its new debt in 2009 due to an increase of 5 trillion yuan, the total accumulated debt over the years has reached 11 trillion yuan, local government credit financing platform revenue accounted for 240% local government, local fiscal deficit rate rise.

long as the government of this part of the debt burden of lack of timely repayment of government financing platform will break the normal operation of the government credit, undermine the image, making the government is facing a huge credit risk.

Second, financial credit risk. Banks in the process of cooperation with these platforms, even if faced with a financial opaque financing of asymmetric information platform company, but because it is the government-backed loans and financing platform will improve the solvency of such trust, led to the emergence Repeat security, virtual security and other issues, so that banks face greater capital risk. Whether the local government is to rely on the operation of financial reimbursement or rely on the land are simply unable to meet debt service requirements, even by means of transfer of such illegal operations is only temporary relief, the risk can not be eliminated.

third is social stability risk. A large number of loan funds into local government financing platform, out of the operating business loan demand; land operation throughout the whole process of local government finance, land protection and increased risk of eighteen million mu of arable land will face great red challenges. Economic instability in the post-crisis period, the macroeconomic impact of government finances once again bound to seriously affect the level of consumption and employment rates, unregulated expansion of local government financing platform hidden in a huge social stability risk.

(c) Local government financing platform for regulators and the community has caused great concern. Local government finance multi-platform hidden risks, regulators and the community has caused great concern. July 2009 the State Banking Regulatory Commission formally issued also strictly require any single loan amount of more than 5% of the total project investment of 500 million or more must be paid to the trustee by way of loans, regulated trust, banking, most of the government policy letter tripartite cooperation projects. January 19, 2010 the State Council Premier Wen Jiabao hosted the fourth plenary session, the meeting proposed to play a better fiscal policy's role in expanding domestic demand, as soon as possible to develop standardized platform for local government financing measures to guard against potential financial risks . People's Bank of China Governor Zhou Xiaochuan at the same time the central bank said the 2010 work meeting, to be a reasonable assessment and effective platform for local government financing to prevent credit risks. Through various forms of community also expressed the financing of local government financing platform concerns.

Second, on the platform of economic phenomena, the local government finance debate

(a) of the platform on the legitimacy of local government financing. That the financing of local government financing platform is based on legitimate and legal basis: in March 2009 the People's Bank of China and China Banking Regulatory Commission jointly issued proposed From the perspective of commercial banks, local government financing platform is the local government to form an independent legal entity with an investment company, the development company as a form of financing vehicles to meet the borrower to the bank must have an independent exercise of civil liability legal requirements, so the local government finance platform is based on a legal and legitimate independent legal entity from the bank loans.

that the local government financing platform is not sufficient legal basis for loans, loan debt is difficult to stand, local government credit financing platform is essentially a redistribution between regions of interest, lack of legal basis. Loans from government financing platform security model to see: one is In accordance with the law a foreign government or international economic organizations, except lending loans, handled strictly prohibited, and banks are unable to under the agreement by law to safeguard their interests. The other is a Local government financing platform company has pledged the property and can transfer the right of land transfer to the bank loan proceeds. Although as a debt, but no specific pledge of the subject, it is not possible with great certainty claims, in accordance with existing laws, does not meet the lack of local government financing platform company can not be scheduled repayment of unsecured bank loans at all, but also can not request the court to enforce repayment.

(b) of the platform on local government financing risk analysis. Local government financing platform that risky loans are based on five points:

1, tend to diversify investment and financing mode

2008 years ago, the vast majority of investment and financing platform for local government the main one or two government departments, government resources scattered in various investment companies, the main dispersion operation, there is competition from the interests of the sector project, the result is inefficient use of resources, and when the maturity of the debt does not pay off the debt, only can be returned by the financial sector. After the local government in the creation of investment and financing platform, the general stressed that came from the institutions and mechanisms to ensure that Many local governments have begun to investment in various sectors, financing, project management and supervision functions of integration, coordination and re-division of labor to rebuild the local government investment and financing system. Currently, the local government investment and financing platform for increasing use of PPP (Public (Government) - Private (Private) - Partnership (co)) model, this public-private partnerships model is based on a large number of local government control of public effective integration of resources and market forces a way. Also, there is BT (Build (Construction) - Transfer (transfer)), BOT (Build (Construction) - Operate (operations) - Transfer (transfer)), IOT (Invest (Investment) - Operate ( Management) - Transfer (transfer)), BLT (Build (Construction) - Lease (rental) - Transfer (transfer)) and other models, which makes a lot of social capital in the investment and operation of public infrastructure, improve the state capital leading role and operating income, and ultimately establish a government, enterprises, financial institutions and social capital combine diversified investment and financing system.

2, differences in asset size of the end of years 5

2009, a total local government investment and financing platform for more than 3 800, of which over 70% of county-level platform, the small size of assets, up less money. Small-scale investment and financing company limited, difficult to undertake large scale investment and construction projects, the ability to play in financing and operating power are limited. For this situation, local governments have ideas to expand the size of the company, strengthen its financing capacity. For example, Henan Province, integration of government resources, to build a large platform Tou financing, investment group set up in Henan Province, the provincial government authorized operations within the scope of state-owned assets has become the main investment and financing 省政府. Companies registered capital of 120 billion yuan, 22.0 billion total assets of the Group headquarters, consolidated total assets of 50.4 billion, the group as a major investment and financing platform, effectively expanding the government's investment and financing capacity. While the small-scale investment and financing companies through a joint approach, expanding the company size, for better development. For example, Handan City, Hebei Province, a control; Regulatory Commission supervision; 5 large platform specific implementation is responsible for the project. Although the small size of the investment and financing company, but by the 5 major platform for unified management of investment and financing system, the Handan City, business investment and financing platform capacity and financing capacity is greatly enhanced through the investment and financing platform for investment in the Stone (Chuang) Wu (Chinese) passenger rail lines, access to 3 billion loans from the banks and get lending rate to fall 10 percent discount.

3, of the lack of financial income and debt at this stage the relevance of institutional arrangements, lack of debt and debt repayment mechanism for risk assessment and management difficult. When the local government insolvent, can not effectively settle the case, according to the current bankruptcy system of local government finance,UGG boots clearance, local government financing platform once the bankruptcy, all because there is no repayment of the loan will become the main bank's bad debts.

visible platform for local government finance is closely related to risk and financial risk, financial investment guarantees and bank credit is closely linked to a certain extent, magnified the risk of multiple, local government finance has a hidden platform and long-term risk of the trend.

that the local government financing platform is relatively small risk of the loans in real terms because of its loans to SMEs in the different subject and the general government loans as part of its true subject is more than the average of the enterprise legal person is unique, based also five points:

1. from the premise of the Government will not look back, during the financial crisis facing the economy down expectations, no matter what kind of investments are risky, and loans to local government financing platform endorsed by the government to increase the repayment of the credit limit. As the local government financing platform as a third party guarantee loans to the government, as long as the government does not back there is the possibility of repayment.

2. From the outbreak of the concentration of risk to see, in order to meet the needs of urban infrastructure, local government financing platform to increase the number of loans, most loans are long-term loans, and installment payments in accordance with established practice, not a one-time payment, the risks are gradually dispersed, and will not focus on the risk of the outbreak of the phenomenon, from this perspective, the commercial banks to provide loans to local government financing platform is a rational act.

3. from the Principal of the loan repayment obligations, the local government loans as a financing platform for government action, very little actual work in individual accountability; not to mention large-scale financing, loans and more, no one can afford such a major responsibility, so commercial banks can not implement an internal accountability to the individual. Rapid development of the current economic backdrop, the financial strength of local governments at all levels have a substantial increase in the government solvency growing, short-term credit risk the possibility of the outbreak is not high, therefore, whether the government's fiscal capacity to pay can take on loans to local government concerns about the risk financing platform can be overcome.

4. from the credit risk monitoring, the current government set up by the financial sector investment and financing decision-making committees and oversight committees and offices early intervention, in charge of the Government's investment needs, direction and way of financing, risk monitoring and control, etc. analysis, research, and to some extent control the local government investment and financing risks.

5. local government financing platform for credit risk than the small risk of SME loans. Limited by their asset size of SMEs, risk-resisting ability is weak, unstable operating efficiency, once the socio-economic or sectoral policies volatility adjusted easily affect the survival and development of small enterprises, the higher the probability of exiting the market, the lack of further Loan guarantees, even small and medium entities and can not find the secured party line of credit than the government and financial strength is still high, so the risk of local government financing small relative to the small and medium enterprises, commercial bank credit is the preferred target range of choices.

(c) The effect on local government financing platform for the evaluation of arguments

1. local government financing platform has a positive effect, beneficial than detrimental.

First, in the new round of economic development projects around the country to actively invest, set up financing platform for all levels of government constantly expand the scale of financing, to put more money into the railways, highways, aviation, telecommunications, electricity , urban water supply and other key public facilities, industries and national investments. Through the investment and financing platform for the construction, can effectively operating assets, non-operating assets, state-owned enterprise assets, integrating natural resources and improve efficiency in the use of public resources. China's fixed assets investment, especially investment in the field related to people's livelihood markedly accelerated in 2009, total fixed asset investment 22.4846 trillion yuan, an increase of 30.1%, the growth rate accelerated by 4.6 percentage points over the previous year, the annual infrastructure (net of power) investment 4.1913 trillion yuan, an increase of 44.3%. Shiji Shang ongoing large-scale investment and rapidly growing infrastructure and expanding the infrastructure, increasing the shortage of industrial investment, speed up the improvement of public environment, to some extent to benefit people's lives, for the next economic transformation has played an active role for the consumption growth has created better conditions.

Second, by the local government financing platform to expand domestic demand and maintain steady economic growth, promote domestic demand and restructuring. Government investment in construction projects ongoing capital investment, the funds requested channel break bank credit extended to the capital markets, financing and other trust schemes to reduce the large number of projects under construction and the financing needs of crowding out the real economy, boost private investment demand and stimulate economic recovery. Market-driven private investment growth is the key to economic recovery trend.

Third, the local government through innovative investment and financing platform for the construction of coordination of the functions of government can function in reality the government building on the basis of investment and financing platform to integrate, to make the investment, financing, project planning, project management, project maintenance In the unified government and other institutional mechanisms to coordinate investment and financing operation.

2. local government financing platform is negative a negative effect, more harm than good.

First, the current responsibility of local government financing system is not clear, which led to the growth of investment more than financial capacity, and lack of long-term debt growth and effective management mechanism. Loan repayment period may not be consistent with the term of the incumbent local government debts far beyond its current financial resources, debt levels and repayment ability do not match, the local government security force actions are questionable. Together with the local government through the disclosure of loans financing platform a serious lack of transparency, thus the formation of hidden liabilities rather than dominant compliance liabilities. Where the debt remains high local government credit would adversely affect the conduction and through mechanisms, local government credit financing platform issue will affect the central government.

Second,UGG shoes, the subject of crowding out other loans. Bank loans in order to prevent already become non-performing loans, after the concentration of the loan through the stringent controls put into infrastructure projects have been started, other companies have been operating against credit, new loans, other types of loans accounted for the relative decline .

Third, local governments rely mainly on the local land revenue to repay the debt investment and financing platform, so the objective to push land prices, which significantly contributed to the formation of the real estate bubble, have a serious impact on the economy. Yidan local government financing platform bankruptcy, debt expansion force local government chooses to increase tax will result in out of private capital, corporate profits decline, increased unemployment, social instability and other negative impacts.

Fourth, the local government financing platform loans are short-term behavior of local government. GDP in the current performance evaluation of indicators of government officials, still occupies a major proportion of local government officials and other drivers in the performance concept, through the creation of infrastructure and other investment in GDP performance. Further term of local government officials in the massive debt through various forms of infrastructure development to raise funds, form does not match with the financial ability to repay the debt. Since the system of office responsible for the lack of mechanisms for debt, lack of mechanisms for debt repayment, the term of the loan officer just great way to get the necessary funds, blind borrowing, debt-servicing problems for the previous neglect, leading to the growth of the lack of effective debt management , the spread of the accumulation of the government debt burden.

Fifth, from the current status of local government financing platform loans, the banks credit credit funds have been away from the basic rules and property, as the functions of financial resources for urban infrastructure construction and urban development. Credit funds of the serious fiscal, on the one hand expanded the size of fiscal deficit, fiscal deficits, if more financial crisis continues and the government will cause the loss of credit; the other hand, the control of the credit scale, the total fiscal deficit led to the demand for money increased tightening of monetary policy conditions in the money supply does not increase, so that an inflationary economy gap, causing the price level increase is not conducive to macroeconomic development

(d) The local government financing platform to resolve risk path

1. use of asset securitization financing platform for the local government to resolve the risk. Local government financing platform for the risk of how to resolve, to the view that asset securitization financing platform for the local government to resolve the risk. Securitization of credit assets of commercial banks to maintain or increase of the core capital adequacy ratio in turn part of the table to move sheet risk assets. Platform for local government financing risks, the For the Into the bond market by making it a huge stock of problems to solve, making a huge stock of loans to government financing platform for docking with the bond market, asset securitization. About the large government loan securitization financing platform, increased bond market liquidity, price discovery by the market, thus promoting bond market development. The use of asset securitization financing platform for the local government to resolve practical issues of risk, some experts questioned, every country can afford the financial size of the deficit have objective limits, depending on issue size, use and operation of the management and risk control. If the local government financing securitization platform, there are leading to economic shocks and the risk of currency crisis. Subscribe for securities, the solvency subscriber authentication and risk control of the main issues such as the maturity of our current stock market can not be guaranteed. Old debt new debt pressure may eventually affect the local long-term stability and sustained and healthy economic development.

2. advocates the use of financial resources to debt repayment is also information to digest. Accelerate the pace of regional economic development efforts to increase fiscal space to expand, the financial strength of the accumulation of arrears for loans to digest, first of all establish a new financial deficit for the digestion of debt awareness. In a standard departmental budgets and comprehensive budget, and in strict accordance with budgets. State funds with local governments, prioritize, reasonable budgetary expenditures, appropriate arrangements for special financial loan funds, development of new and old loan principal and interest payment plan arrangements for the annual budget a certain amount of funds for debt service, and according to the financial situation and debt need increases every year, the local government to gradually repay the loan principal and interest financing platform.

whether local governments have the financial resources to digest the huge debt deniers also questioned, only the first half of 2009, local financing platform 8 trillion yuan total assets, liabilities, has reached 5.26 trillion yuan, while the Only 20% of which is financial allocations to local governments, land allocation, transfer and other forms of equity investment, and the remaining funding is largely dependent on bank loans, local governments face serious budget deficit financing platform of its financial resources insufficient to repay the loans owed to the bank.

3. control platform for local financing of new bank lending. The introduction of the credit rating platform for local government financing, limiting the role of local government areas of financing platform and scope of control over local government financing platform for bank lending. For new projects, the central bank and commercial banks, the CBRC will be to local government financing platform for new loans were strictly controlled in order to control risk and protect credit into the real economy. Banks should be carefully incorporated into local government financing platform risk management system. Strict monitoring of the project capital, in-depth analysis of corporate entities ability to repay loans, real-time tracking different parts of the government debt situation and solvency, comprehensive grasp of finance and loan repayment ability of the platform risk. For the huge problem of debt stock can be a way to resolve debt restructuring, focusing on clear debt obligations, amortization, reduced in phases, the local government is responsible as appropriate in accordance with specific security or emergency allocation of special funds.

4. The central government financing platform for the local government loan liabilities. Finance has always been an important basis for the government to perform their duties is an important macro-control lever. Expenditure is to promote stable and rapid economic development of direct and powerful means of ensuring that the policies have been introduced in place as soon as possible. The current local government financing platform for the impact of credit risk has risen a major threat to economic and financial power. Spending priorities should be to grasp, exploration and innovation, focus on reforms of the taxation reform and improve local government financing platform for loan repayment mechanism, better play finance economic growth, ensuring the people's livelihood, maintaining stability in the role. But we should also see our financial situation, according to the Ministry of Finance announced: the cumulative January-December 2009, the national fiscal revenue amounted to 6.8477 trillion yuan of Statistics, an increase of 19.5%; the national fiscal expenditure was 7.5874 trillion yuan, up 25.4% ; deficit of about 739.7 billion yuan, representing a deficit of 111 billion yuan in 2008 in terms of increasing the stock of our fiscal deficit. The central government should act on the spur economic growth, for example, the strategic adjustment of economic structure and increase efforts to focus on expanding domestic demand and promoting consumption, investment and exports,Bailey UGG boots, after all, economic power is a major component of overall national strength.