Audit Shows That Local Government Debt Exceeds 10 Trillion

By the end of 2010, the balance of local government debts of three provinces, municipalities and counties totaled 10 trillion and 717 billion 491 million yuan. Liu Jiayi, the auditor general of the Audit Commission, reported to the Standing Committee of the National People's Congress yesterday for the first time to disclose the debt situation of local governments in China, which accounted for 1/4 of GDP in 2010 and exceeded the national revenue of that year.

The head of the Audit Commission said the local government

How big is the scale of China's local government debt? This is a major issue related to national economic security, and has also attracted much attention.

Earlier, according to the relevant data of the central bank and the China Banking Regulatory Commission, some media speculated that China's local debt scale was 14 trillion and 400 billion and 9 trillion and 100 billion respectively.

Previously, the audit department conducted a partial investigation, investigating 18 provinces, 16 cities and 36 county level, as of the end of 2009, the local government debt balance of 2 trillion and 790 billion yuan.

In order to get accurate data, the Audit Office invested more than 40 thousand people, spent more than 3 months to conduct a thorough investigation.

According to the report, by the end of 2010, except for 54 county governments without government debts, the balance of local government debts of three provinces and municipalities nationwide totaled 10 trillion and 717 billion 491 million yuan.

Data show that in 2010, the total GDP of the country was 39 trillion and 800 billion yuan, and the national revenue was 8 trillion and 300 billion yuan.

Among them, the government has a debt repayment rate, that is, it is liable to pay.

"Overall, the burden of local government debt has not exceeded its solvency."

Chen Chenzhao, deputy director of the National Audit Office of the local government debt Office of the National Audit Office, said.

problem

Local violation guarantees 46 billion 400 million yuan debt

The audit found that 7 provincial-level, 40 municipal and 107 county governments and departments concerned, in 2010, under the State Council's explicit prohibition of government guarantee, the violation provided a guarantee for 46 billion 475 million yuan debt; because of the blindness and inadequate project preparation in some places, there were 131 billion 980 million yuan to the end of 2010, which had not yet been paid for the debts borrowed in 2008 and the previous year. In the same year, financial funds paid interest 6 billion 774 million yuan, and 35 billion 100 million yuan debt funds were invested in capital markets, real estate and "two high one surplus" (high energy consumption, high pollution, excess energy production) projects.

20% government debt, super safety alert.

Liu Jiayi said that some areas and industries have weak solvency and there are potential risks.

From a regional perspective, there are 78 municipal and 99 county-level governments with a debt rate above 100%.

This has exceeded the internationally recognized safety standards.

They accounted for 19.9% and 3.56% of the total two government respectively.

Due to the lack of solvency, some local governments can only repay old debts by borrowing new debts. By the end of 2010, 22 municipal governments and 20 county governments had borrowed more than 20%.

There are also overdue debts in some areas, with 4 municipal governments and 23 county-level governments over 10%.

2 trillion and 500 billion debt is also selling land.

At the same time, debt repayment in some places is more dependent on land sales income.

At the end of 2010, the debt balance of the local government with the responsibility to repay the debt was 2 trillion and 547 billion 351 million yuan, which promised to use the land revenue as the source of debt repayment, involving 12 provincial, 307 municipal and 1131 county-level governments.

From the industry perspective, the debt balance of expressways, local colleges and hospitals and more than 90% is secured debt or

Finance Companies violation amount two hundred billion

Three level government established

proposal

Giving provincial governments moderate debt rights

The Audit Office recommends that, in accordance with the principle of who is responsible for the debt, it will handle the stock debt actively and safely in different situations.

We will continue to promote the clean-up and standardization of financing platform companies and resolutely curb local governments' illegal guarantee activities.

A standardized local government debt financing mechanism should be established to implement full caliber supervision and dynamic monitoring.

It is possible to study and grant provincial governments moderate debt raising rights, and gradually explore and push them to the qualified municipal governments. The debt raising plan needs to be approved by the State Council, and the local debt budget should be compiled, which should be incorporated into the local budget management and be submitted to the people's congress at the same level for examination and approval.

Dispel doubts

10 trillion is the debt scale large?

[Abstract] in the 10 trillion and 700 billion local debt, the government has 6 trillion and 710 billion 951 million yuan to repay the liability, accounting for 62.62%, 2 trillion and 336 billion 974 million yuan of the guarantee responsibility, accounting for 21.80%, and 1 trillion and 669 billion 566 million yuan, or 15.58% of the liability for salvage.

[interpretation] Zhang Bin, director of the Tax Research Office of the finance and Trade Institute of the Chinese Academy of Social Sciences: in terms of existing financial resources, this figure is not very large.

First of all, the main body of these local debts is scattered in three levels of government, with many subjects. Each government's local debt is dispersed in many projects, while some projects have strong solvency and no need for financial capital to repay them.

At the same time, from the repayment period, dispersed in a relatively long period of time, not short-term concentrated repayment, so the local government's ability to repay loans will not cause great pressure.

Zhang Bin said that local construction needs a lot of money, but under the current financial system, although pfer payment is used as a means of regulation, the central and local fiscal power does not match, and local governments can only raise funds through local financing platforms.

Will the local government be insolvent?

[Abstract] by the end of 2010, local governments at provincial, city and county levels had the debt rate of debt repayment, that is, the ratio of debt repayment to local governments' comprehensive financial resources was 52.25%, plus local governments' liabilities or liabilities, and the debt rate was 70.45%.

[interpretation] the head of the Audit Commission can not simply regard the debts of the government as a direct government debt, or else it may artificially expand the risk of government debt.

If we simply rely on the scale of debt, growth rate and other indicators, we can not fully and accurately judge the degree of debt risk.

Only when the debt balance is compared with the government's disposable public resources, when these resources are insufficient to repay the existing debt, does it mean that there is a debt crisis.

In addition, from the economic effect, social effect and ecological effect of the debt capital investment, it is necessary to analyze whether the debt borrowing and economic and social development are compatible, and whether a benign cycle has been formed.

"Overall, the burden of local government debt has not exceeded its solvency."

Is debt increasing due to financial crisis?

[Abstract] in the balance of local government debt at the end of 2010, a total of 51.15% yuan amounted to 5 trillion and 481 billion 611 million yuan, which was borrowed in 2008 and the previous year and used to continue construction projects before 2008. Among them, 3 trillion and 198 billion 904 million yuan in 2008 and the previous year accounted for 29.85%.

[interpretation] the head of the Audit Commission: our local government debt is not in recent years. It can be traced back to 1979.

Since then, debt has been started everywhere.

By the end of 1996, all provincial governments, 90.05% municipal governments and 86.54% county governments had borrowed debts.

By the end of 2010, there were government debts in other parts of the country except 54 county governments without government debts.

Local government debt has been accumulated over the years, and it can not be understood unilaterally as a result of coping with the international financial crisis.

Zhang Bin, director of the Tax Research Office of the finance and Trade Institute of the Chinese Academy of Social Sciences, said that in the past two years, the amount of local debt issuance was large, mainly after the economic crisis in 2008, the central government introduced a 4 trillion stimulus plan.

Against this background, local governments need to have some matching funds for landing projects, and in the case of limited financial resources, they will surely adopt various channels for financing.