Local government debt and municipal bonds in China: Problems and a framework of Rules

Copenhagen Journal of Asian Studies

Volumn 31, Issue 2, 2013, Pages 23-53

  Feng, Xingyuan ^a  

^a Rural Development Institute of China Academy of Social Sciences Unirule Institute of Economics   (China)

Author keywords

China; Local government bonds; Local government debt; Local government financing vehicle companies; Municipal bonds; Urban development bonds

Indexed keywords

DEBT CRISIS; FINANCE; INVESTMENT; LOCAL GOVERNMENT; POLITICAL ECONOMY; URBAN DEVELOPMENT;

CHINA;

EID: 84902195179     PISSN: 13954199     EISSN: None     Source Type: Journal    
DOI: 10.22439/cjas.v31i2.4332     Document Type: Article

References (51)

1. An, Yikuan, and Wang Zhiyu 2000. 'Using Municipal Bonds to Drive the Construction of Urban Infrastructure', China Investment 9: 18-20.
2. Ba, Shusong, and Xing Yujing 2009. 'From Urban Investment Bonds to Municipal Bonds: The experience of mature markets', Guandian Net, 24 November. Available at: http://www.guandian.cn/article/20091124/88952.html (in Chinese); accessed 29 November 2013.
3. Brennan, Geoffrey, and James. M. Buchanan 1980. The Power to Tax: Analytical Foundations of a Fiscal Constitution. Cambridge: Cambridge University Press.
4. Brennan, Geoffrey, and James M. Buchanan 1985. The Reason of Rules: Constitutional Political Economy. Cambridge and New York: Cambridge University Press.
5. Breton, Albert 1996. Competitive Governments: An Economic Theory of Politics and Public Finance. New York: Cambridge University Press.
6. Cao, Jinling 2013. 'Withdraw the Hidden Debt Guarantees is a Pressing Matter', China Business News, 12 July.
7. Chen, Hanhui, and Zhe Wu 2012. 'Guangdong Said Good Bye to "GDPism" and Enforced Different Performance Criteria for Different Zones'. Enorth Net, 16 November. Available at: http://news.enorth.com.cn/system/ 2012/11/06/010237423.shtml (in Chinese), accessed 25 October 2013.
8. China Industry Research Net 2012. 'A Survey on the Development of the Market of Urban Investment Bonds in 2012', 25 December. Available at: http://www.chinairn.com/news/20121225/524868.html, accessed 28 May 2013.
9. China Urban and Rural Finance Daily 2012. 'The Amount of Policy Finance Bonds Issued This Year Will Exceed RMB 2 Trillion', 24 December. Available at: http://www.how-buy.com/news/2012-12-24/1778051.html (in Chinese), accessed 27 May 2013.
10. Dong, Yunfeng 2012. 'Local Financing Vehicle Companies Switched to Targeted Instruments Aiming at Fundraising With "Big Stomach"'. China Business News, 23 August.
11. Fan, Liming, Qiyun Li, et al. 2001. Analysis of Local Fiscal Practices in China. Beijing: Economic Sciences Press.
12. Feng, Xingyuan 2010. Local Government Competition. Nanjing: Yilin Press.
13. Feng, Xingyuan, and Xiaojia Li 2005. 'Debts of Municipal Governments and Framework of Order for Municipal Bonds'. Management World 3: 29-42.
14. Fisher, Ronald C. 1996. State and Local Public Finance, 2nd ed. Chicago: Richard D. Irwin, Inc.
15. Gu, Huizhong 2000. 'Local Government: How Big is the Debt Risk?' Voice of Reform 5: 31-33.
16. He, Yang, and Yanyun Man 2011. 'Local Debt Scale in China and an Analysis of its Risk'. Working Paper of Peking University-Lincoln Institute Urban Development and Land Policy Research Center, No. W093, October.
17. Herrmann-Pillath, Carsten 1999. 'Die fiskalische und regionale Dimension des systemischen Wandels großer Länder: Regierungswettbewerb in China und Rußland'. Diskussionspapier, Fakultät für Wirtschaftswissenschaft der Universität Witten/Herdecke, Heft 42, September.
18. Herrmann-Pillath, Carsten, and Xingyuan Feng 2004. 'Competitive Governments, Fiscal Arrangements, and the Provision of Local Public Infrastructure in China: A Theory-driven Study of Gujiao Municipality'. China Information 18 (3): 373-428.
19. Hobbes, Thomas 1651/1969. Leviathan. London: Scolar Press.
20. International Monetary Fund 2013. 'China: Explaining " Augmented" Government Debt and Deficit'. Available at: www.imf.org/ external/np/sec/pr/2013/pdf/pr13192an. pdf, accessed 29 November 2013.
21. Jin, Hehui, Yingyi Qian, and Barry Weingast 2005. 'Regional Decentralization and Fiscal Incentives: Federalism, Chinese Style'. Journal of Public Economics 89 (9-10): 1719-1742. (Pubitemid 41093633)
22. Levitsky, Steven, and Lucan A. Way 2013. Competitive Authoritarianism. Hybrid Regimes After the Cold War. Cambridge: Cambridge University Press.
23. Li, Shanghong 2000. 'Examination of Problems in Local Government Debt'. Exploring Economic Issues 7: 55-57.
24. Li, Shaomin, Shuhe Li and Weiying Zhang 1998. 'Cross-regional Competition and Privatisation in China'. MOST: Economic Policy in Transitional Economies 9 (1): 75-88. (Pubitemid 29338009)
25. Li, Yuequn 2011. Local Governments' Debt Ratios Are Too High: Be Cautious of the Outbreak of the High Tide of Bad Debt, China News Service, 16 September.
26. Li, Yumin 2013. 'Urban Investment Bonds Were Issued in an Immense Amount in and the Possibility of the Outbreak of a Crisis Is Increasing'. National Business Daily, 7 January.
27. Lu, Xinjie 2012. 'A Study on the Problems of Local Government Financing Vehicle Companies in China' (Dissertation). Chengdu: Southwestern University of Finance and Economics.
28. National Audit Office 2011. Audit Results on Local Government Debt in the Whole Country, 2011 Audit Report No. 35, 2011.
29. National Audit Office 2013. Audit Results on the Debt of Local Governments of 36 Local Jurisdictions, Audit Report No. 24, 2013.
30. Netease Finance 2013a. 'China Banking Regulatory Commission: The Balance of Loans of Local Government Financing Vehicle Companies Reaches RMB 9.2 Trillion', 29 January. Available at: http://money.163.com/13/0129/17/ 8MDF79KV00253B0H.html (in Chinese), accessed 28 May 2013.
31. Netease Finance 2013b. 'The Former Ministry of Railways Realized a Profit of RMB 196 Million While Held a Debt of RMB 2.79 Trillion', 27 April. Available at: http://money.163.com/13/0427/16/8TFSS4QK002526O5.html (in Chinese), accessed 27 May 2013.
32. Nie, Ou 2013. 'Local Financing Vehicle Companies Slam a Hard Brake on Debt Raising'. Business and Economy Weekly, 12 April.
33. Research Team of the Project on Problems with County and Township Level Government Finance in China 2005. Report on Problems with County and Township Level Government Finance in China. Beijing: Academy of Macroeconomic Research of National Development and Reform Commission.
34. Shi, Jinfeng 2012. 'A Year after Defaulting, "Yunnan Roads" Is Back in Business'. 21st Century Business Herald, 22 November. Available at: http://author.21cbh.com/shi-jinfeng, accessed 6 May 2013.
35. Shi, Jinfeng 2013. 'The New Policy of Classifying On- and Off-sheet Businesses is Targeting the Financing Problems of Financing Vehicle Companies and the Real Estate Sector: The CBRC Announced Its Active Support for Investment in Key Projects in Railways, Roads and New Industries'. 21st Century Business Herald, 29 January.
36. Shen, Yubiao 2010. 'China's Population Expected to Reach 1.5 billion by 2030, Balanced Development Essential'. China Broadcast Net, 23 October. Available at: http://www.cnr.cn/allnews/201010/t20101023-507212692.html, accessed May 20 2013.
37. Standard Chartered 2013. 'Asia Leverage Uncovered', 1 July.
38. Sun, Qing 2013. 'Local Financing Vehicle Companies Got Implicitly Connected to Oversee Funds, With Microcredit Companies Acting as Intermediaries'. China Business News, 1 June.
39. Wang, Mei 2013. 'About the Debt Size of Local Financing Vehicle Companies: The Difference between the Reports of the National Auditing Office and the China Banking Regulatory Commission'. China Business News, 30 May.
40. Wang, Xiaohui 2012. 'The Unification of Different Pension Systems is Not Included in the Reform of the Income Redistribution System and the Ratio of Empty Accounts is High'. Huaxia Times, 3 November.
41. Wei, Jianing 2004. 'Debt and Financial Risk in Local Government in China'. Commercial Weekly, 5.
42. Xu, Shijie 2001. 'Municipal Bonds in the United States and Inspiration'. China Investment, 7.
43. Xu, Tiaoxiao 2013. 'Trust Borrowing for Investment in Real Estate Is Boosting Up Only More Than One Month After the Rough Assessment of Local Government Debt through Auditing'. Securities Daily, 6 September.
44. Yang, Qianwen 2013. 'Moody: The Trend of the Increase in Local Government Debt Will be Reversed with the Gradual Increase in Default Risks'. China Business News, 20 March.
45. Yang, Y., and L. Wu 2013. 'SASAC Warns of Risks of Local Financing Vehicle Companies, With a Debt Size Amounting to RMB 13 Trillion by End 2013'. Economic Information Daily, 22 January.
46. Yu, Bing, and Jianing Wei 2012. A Study on Fiscal and Financial Risks in China. Beijing: China Development Press.
47. Zhang, Taixin 2013. 'The Net Increase of the Amount of Urban Investment Bonds May Reach RMB 1 Trillion'. China Securities Journal, 20 March.
48. Zhao, Xu 2010. 'Rapid Increase of New Issuance of Local Enterprise Bonds with Rise of Medium and Small Scale Securities Dealers'. Shanghai Securities News, 4 January.
49. Zheng, Chunrong 2012. 'The Real Risks of Local Government Debts in China: Risks Beyond the Default Risks'. Public Administration Review 4: 52-76, 179-180.
50. Zhou, Li'an 2004. 'Incentive and Cooperation among Chinese Officials in an Increasingly Intense Game - Discussing Local Protectionism in China and the Reasons for Continued Re-construction'. Economic Research Journal 6: 33-40.
51. Zhou, Li'an 2007. 'A Study on the Model of the Career-centered Economic Championship Contest of Local Government Officials in China'. Journal of Economic Research 7: 36-50.