Research on the Early-Warning System of Risks in Local Government Debt

Since the economic crisis erupted in 2008, Chinese government has carried out the proactive fiscal policy and moderate looser monetary policy, which has kept down the tendency of declining economic growth. At the same time, Chinese government debt risk problem has emerged. How to manage the risk of local government debt exposure has been a major challenge to local government. This paper carried on research about the local government debt risk pre-warning problem to find out a more accurate index that can reflect the local government debt risk, and aimed to establish a system model that can properly evaluate and warn the Chinese local government risk. The study adapts the Chinese present financial system reforms, and will have great theoretical significance and practical value.