What Is Government Debt?

Government debt (also known as public debt) refers to government debt that is issued by the government at home and abroad or borrowed from foreign governments and banks. Specifically, it refers to the government's creditworthiness. As a credit method between the debtor and the creditor in accordance with the principle of compensation, the government raises financial funds. It is also a special method for the government to dispatch social funds to make up for fiscal deficits and regulate economic operations Allocation. Government debt is an important part of the entire social debt.

Government debt

Government debt (also known as

Government debt has a long history as a fiscal category.

Government debt is a special fiscal and credit category. It is first and foremost a kind of non-recurring government fiscal revenue.

The classification of government debt by different classification methods usually has the following types:

Government debt as a

Interim Measures for Liaoning Provincial Government Debt Management

Department: Liaoning Provincial People's Government

Issue number: Liaoning Provincial People's Government Order No. 133

Article 1 These Measures are formulated in order to strengthen the management of government debts, regulate the behavior of governments at all levels in the province and their affiliates to borrow and repay government debts, and prevent and resolve the risks of government debts.

Article 2 "Government debts" as mentioned in these Measures refer to debts borrowed or legally guaranteed by the government and its affiliates, and debts that need to be repaid by the government under certain circumstances.

Article 3 These measures apply to the borrowing, use, repayment and supervision of debts of governments at all levels in our province.

Article 4 The financial departments of provinces, cities and counties (including county-level cities and districts, the same below) are responsible for the supervision and management of government debt at the same level and below.

Audit agencies audit government debt in accordance with law.

Article 5 Borrowing government debts shall follow the principles of moderate tightening, risk prevention, capacity-building, focus on efficiency, and clear responsibilities.

Article 6 The scale of government debts shall be commensurate with the development of the national economy and the disposable financial resources of the region.

Government debt funds shall not be used for recurrent expenditure and construction of competitive projects.

Article 7 Except as otherwise provided by law and the State Council, the government shall not issue local government bonds.

Article 8 Borrowing of government debt shall implement in advance the sources of debt repayment funds, debt repayment obligations, and measures to resist risks.

Article 9 Government debt income and expenditure that need to be repaid with financial funds upon approval by the government at the corresponding level shall be included in the fiscal budget.

Government debt income and expenditure borrowed by government departments should be included in the department's comprehensive budget.

Article 10 Governments at all levels and their affiliated departments may not act as guarantors of government debt, except those approved by the State Council to use foreign government loans or loans from international financial organizations for refinancing.

Article 11 Where municipal governments and provincial government departments borrow government debt, they shall submit to the provincial government department a scale plan for borrowing government debt in the region and next year before November 15 of each year. Only after government approval.

If the scale of borrowing government debt needs to be adjusted, it shall be examined and approved in accordance with the procedures prescribed in the preceding paragraph.

Municipal and provincial government departments must borrow within the approved scale.

Article 12 Units applying for borrowing government debts shall provide the following information to the financial department at the same level:

(1) Application for borrowing government debt;

(2) the approved project proposal and feasibility study report;

(3) financial statements;

(4) Other materials deemed necessary by the financial department.

An application for government debt should state the following:

(1) Project name and content;

(2) the amount, source, term, and interest rate of borrowing debt;

(3) Implementation of supporting funds;

(4) the impact of repayment plans and borrowing of government debt on fiscal budgets and departmental budgets;

(5) the source of repayment funds and the person in charge of debt repayment administration, the person in charge of debt repayment supervision administration, and the ultimate debtor;

(6) Other matters that should be stated.

Article 13 After examining the information listed in the preceding article, the financial department shall report it to the government at the same level for approval. However, if the debt ratio exceeds 100%, it shall be submitted to the provincial government for approval after being examined by the provincial financial department.

Government debts that require higher-level governments or financial departments to transfer loans and guarantees must be reported to higher-level governments for approval. At the time of examination and approval, the repayment commitment document made by the executive meeting of the government at the corresponding level and the debt repayment obligation signed by the person in charge of debt repayment with the government at the corresponding level shall be issued.

Article 14 The unit using government debt funds is the ultimate debtor (hereinafter referred to as the ultimate debtor). Ultimate debtor

How to measure whether government debt risk is controllable?

There are three common tools in the world, namely the debt ratio, government external debt

Moody's, a well-known international rating agency, issued a report on July 28, 2013. According to estimates, from the end of 2010 to the end of 2012, the direct and guaranteed debt of Chinese local governments may have risen by 13% to 12.1 trillion yuan. Moody's warned that the central government is at risk of providing relief for local government debt.

On July 28, 2013, the National Audit Office's website announced that according to the requirements of the State Council, the National Audit Office will organize national audit institutions to audit government debt.

Many experts said that the Audit Office s comprehensive government debt audit this time means that a full-scale and full-scale government debt investigation has begun.

Regarding the scale of local government debt nationwide, the latest official data are the results of the national government debt audit issued by the National Audit Office in 2011. As of the end of 2010, the balance of local government debt at the provincial, municipal, and county levels was approximately 10.7 trillion yuan. After more than two years, the scale and structure of local government debt nationwide should have changed.

Bank of Communications chief economist Lian Ping believes that the full-scale investigation of the scale of local government debt may start from two aspects: one is the size of the debt of the region as the main body; the other is the debt size of the platform company.

Dong Dasheng, Deputy Auditor-General of the National Audit Office, once estimated that the debt scale of China's governments at all levels should be around 15 trillion to 18 trillion yuan. Former Minister of Finance Xiang Huaicheng revealed recently that local government debt may exceed 20 trillion yuan. Ma Jun, chief economist at Deutsche Bank Greater China, believes that since 2009, China's local government financing platform debt has risen to about 20% of GDP. As regulators tightened bank loans to local government financing platforms, starting in 2012, local government financing platforms shifted to financing through trust loans, and local debt risks began to manifest themselves in new forms.

Experts said that since 2012, the issuance scale of urban investment bonds, trust plans, short-term financing bonds, and medium-term notes has grown rapidly. Relative to banks, the size of non-bank institutions that implement non-credit financing is relatively small, and their risk management capabilities are relatively weak. Local governments financing through shadow channels is too fast and too large, which is likely to cause risk to accumulate quickly and be transferred to banking institutions Transfer.

Regarding the risks of shadow financing channels for local debt, the regulatory authorities may have prepared precautionary measures. In March 2013, Lou Jiwei, Minister of Finance, said that the Ministry of Finance is deploying research on local debt and adopting policies by category to stop the trend of local government debt expansion.

The CBRC previously issued a notice on full-caliber statistics on local financing platform financing, requiring banking financial institutions to report quarter-to-quarter statistical data on local government financing platform financing quarterly from the second quarter, and for the first time to require statistical banks to invest in local governments through wealth management products. The balance of the financing platform.

China's government debt at all levels exceeds 20 trillion, and the overall risk is under control

On December 30, 2013, the National Audit Office issued a national government debt audit results announcement. The announcement stated that as of the end of June 2013, the debts of governments at all levels in China were 20.698865 trillion yuan, and the debts with guarantee liabilities were 29256.649 billion yuan. RMB, and the debt that may bear some rescue responsibility is RMB 66,504,560 million.