Zhou Xiaochuan: It is necessary to issue local debt

Reporter: Fang Ye intern: Fan July 4, in the "China regional financial eco-environmental assessment" Results of the conference, Zhou said that the current need to issue local government debt and municipal debt. Zhou Xiaochuan said that there were many local governments ' administrative intervention in the economy in the middle of the 90. After the 1998 Asian financial crisis, the central government began to demand a reduction in local intervention. At present, China is in the stage of speeding up the development of urbanization, the development of urbanization needs a reasonable mechanism, but the current financial system is not enough to meet.　　Local governments have a need to issue bonds at a moment when local governments are less financially well-off. However, due to the lack of reasonable mechanism, the local government has now made a variety of financing platforms, the difference is very difficult to manage. There are even some projects using government guarantee to finance, the legality is still to be confirmed, which belongs to the obvious "edge-ball" behavior. If the issue of local government debt and municipal debt as the local government financing "open the front door", the current local government financing platform as a "door", said Mr Zhou: "from the front door or door look, or open the front door good." "As for the issue of" new issues "that may exist in the issue of local government debt and municipal debt, that is, the failure of newly-elected officials to repay the debts issued by incoming officials, Mr Zhou said that although it could not be fully resolved, there could be a variety of restrictions. He said whether the new local government intends to repay the debts of its former debt will be converted to the price of the current issue of debt, worse even to limit its next financing, and by directing public opinion to pressure on the government. "These (means) are not sufficient, but they will work."　　"he said. As to whether the rating agencies can objectively assess the issue of bonds, Zhou Xiaochuan said that many of the evaluation indicators are financial data and other attributes, with a certain degree of objectivity.　　In the evaluation process, the central bank will also instruct the rating agencies to make the information public as much as possible and to consider the remuneration of the ratings work to be raised by investors. In addition, Zhou said that the current municipal financing behavior can be attributed to the source of capital, so can also be controlled by leverage. So while there are many problems in issuing local debt, it should be pushed forward.