Pan Gongsheng Said The Main Body Of Debt Repayment Should Be Consistent With Municipal Debt.

Pan Gongsheng, vice governor of the people's Bank of China, today, at the press conference and Academic Symposium on China's regional financial ecological environment evaluation jointly sponsored by the Chinese Academy of Social Sciences and China's < a href= "http://www.91se91.com/" > financial /a /a society, said that China's government debt risk is controllable, and debt rate and debt repayment rate are all internationally recognized safety standards.

At the same time, most of the local government debt is investment debt, forming a large number of high-quality assets and operating income, which is essentially different from the consumption type and welfare type debt of some countries.

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< p > as early as 2004, < a href= "http://www.91se91.com/" > the people's Bank of China < /a > President Zhou Xiaochuan proposed the concept of "financial ecology", and explored the organic connection between financial reform and development and external credit environment with the help of ecological theory.

Over the past more than 10 years, China's financial development has achieved a historic leap. Financial formats and financial entities are increasingly diversified.

The community has also carried out extensive theoretical discussions and practical activities around the relevant contents of financial ecology.

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< p > < < a href= > http://www.91se91.com/ > > the third Plenary Session of the 18th CPC Central Committee > /a > decision put forward the establishment of a pparent and standardized investment and financing mechanism for urban construction, allowing local governments to expand the financing channels for urban construction by issuing bonds and so on, and establish a standardized and reasonable early warning mechanism for debt and risk management of the central and local governments.

From these points of view, it is necessary to establish a financial ecosystem with fair and pparent rules, diversified market entities and full and orderly competition.

Pan Gongsheng said.

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< p > since local government bonds have been written into the the third Plenary Session of the 18th CPC Central Committee decision, municipal bonds may become an important option for future urban construction financing, but there are still different views on how to issue bonds.

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< p > Pan Gongsheng pointed out that from the perspective of financial ecology, the key to allow local governments to raise funds through issuing bonds and other means is to build an endogenous credit mechanism with clear responsibilities and incentive compatibility.

From the international experience, most municipal governments' municipal bonds are issued by municipal, county and county governments.

China's municipal debt should also be issued by municipal governments in accordance with the direction of reform of fiscal and taxation systems that suit the responsibilities and responsibilities of expenditure.

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< p > "but in practice, it is advocated that the central government or provincial governments replace the lower level government bonds, which may be the way to control the financing scale and financing behavior of local governments in this way, but this practice is not desirable."

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"P >" Pan Gongsheng believes that the higher government's debt issued by the superior government actually implied the superior government guarantee, which is essentially the endorsement of the higher government's credit for the lower government, which will cause no difference in credit between the cities and counties, and can not make the correct risk premium. The pricing and screening mechanism of the financial market is difficult to play, the risk of breach of contract can not be exposed in time, the market credit mechanism will be distorted, the municipal debt will be reduced to a simple financing tool, the bank loan is not different from the bank loan, the advantages of the financial market binding force are not fully exerted and the municipal bond market is also hard to develop healthfully.

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< p > "the higher government will issue bonds on behalf of the government. The lower government may focus on competing for indicators and contention. It is not only difficult to control the risk of debt expansion, but also easy to breed rent-seeking corruption.

Moreover, which city can issue bonds and pay much debt is the government's final say, rather than the financial market's final say, which will eventually lead to the unsustainable source of debt repayment, which will increase the risk of debt. "

Pan Gongsheng said.

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< p > starting from the consistency of responsibilities and expenditure responsibilities, the issuance of municipal debt in the future should mainly bear the municipal government of the power of urbanization construction, so that the cities that really use capital can issue bonds independently, so that the main body of debt issuance and debt repayment entities can be truly consistent, Pan Gongsheng said.

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< p > on the issue of investment entities in municipal bonds, Pan Gongsheng said that another important problem in the platform loan financing mode is the mismatch of terms of maturity, the duration of financing and the construction of projects and the asymmetry of the income period. In 2010, when the platform loans were limited, they borrowed money from the "shadow banks" which relied on short-term financial management to obtain funds, which further aggravated the time mismatch problem, and caused the increase of financing cost and debt burden.

"The key to solve this problem is to improve the long-term investment and financing system, develop multi-level capital markets, and improve corporate governance, taxation, accounting standards and other long-term mechanisms to attract long-term investors such as pensions, insurance companies and sovereign wealth funds to participate in the capital market."

Pan Gongsheng said.

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According to international experience, P should also encourage local residents to invest in local municipal bonds.

By the end of 2012, the proportion of residents of municipal debt investors in the United States was as high as 44.6%. Some of the municipal debt held by mutual funds also came from households.

This structure not only helps to prevent risk diffusion, but also enables local residents to be familiar with the information superiority of local municipal projects and better supervise the use of funds.

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< p > of course, to build a financial ecosystem, we must strengthen fiscal discipline, improve the budget balance mechanism across the year, explore the preparation of the local government balance sheet, and stick to the principle of central government or higher authorities not paying close attention to debt paying responsibilities, and limit their general administrative expenditure and refinancing to high-risk areas beyond the debt warning line.

At the same time, we must improve the financial market constraints, strengthen the full disclosure of information and market pricing mechanism, and improve the rating system of municipal debt.

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< p > "fundamentally, in order to really straighten out the behavior of government financing, the key is to make the market play a decisive role in the allocation of resources, speed up the pformation of government functions, and make the government behavior truly turn to macro-control, public services, safeguard fair competition and promote sustainable development."

Pan Gongsheng said.

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