The Government Can Stage And Leverage To Support Enterprise Progressive " Deleveraging "

The Ministry of Finance issued a report on the issue of government debt by the head of the Ministry of finance.

The official pointed out that there is still room for debt in our government debt.

In order to implement the central task of "deleveraging", the government can increase leverage by stages and support enterprises to gradually "de leverage".

In view of the current situation of providing guaranty commitment or repurchase for some parts of the bank, such as bank loans, the official said that the Ministry of Finance organized the power to carry out investigation and verification, timely communicate with the parties concerned, and urge relevant financial institutions to carry out their business according to law.

In the future, the Ministry of Finance shall, in strict accordance with the provisions of the budgetary law, investigate the responsibility of the relevant responsible persons of the local government in accordance with the provisions of the budgetary law and make public to the society.

"According to the newly revised budget law, moderately increasing the scale of issuance of government bonds and local government bonds is an important measure for the government to regulate and increase leverage in accordance with the law, which can avoid the negative impact of social debt contraction on the economy.

With the gradual decline of the lever of the whole society, the government's leverage can also be gradually released.

"The person in charge said.

In recent years, the Ministry of finance has been monitoring the risk of local government debt.

At present, the problems of local government debt management include: the overall solvency of local governments has declined, and the risk of local debts has increased. Local governments' illegal or disguised bond guarantees still occur; irregular PPP mode.

For these problems, relevant departments are urging local governments and relevant financial institutions to take measures to solve them.

According to the introduction, as at the end of 2015, the central government debt included in the budget management was 10 trillion and 660 billion yuan, the local government debt was 16 trillion yuan, and the total two items were the national government.

26 trillion and 660 billion yuan, accounting for 39.4% of GDP.

In addition to the local government or debt (that is, the debt of the government and the liability for a certain extent of relief), the debt ratio of the national government debt will rise to about 41.5% in 2015, according to the average compensation rate of 20%, which is calculated by the audit office in June 2013.

The above debt level is lower than the EU's 60% warning line, which is also lower than the current major market economy and emerging market countries (such as Japan's over 200%, the United States more than 120%, France's 120%, Germany's 80% or so, Brazil's 100%).

The official said, at present, China's local government debt risk is generally controllable.

According to the international debt ratio (debt balance / comprehensive financial resources) index, the local government debt ratio in 2015 was 89.2%, lower than that of the local government.

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In addition, unlike the debt crisis countries, China's local government debt has formed a large number of high quality assets corresponding to debt as debt protection, and China's economy will maintain rapid growth in the next period of time, which also provides a fundamental guarantee for debt repayment.

Promoting the marketization of financing platform companies

In this regard, the official said that the Ministry of finance is now working on the relevant system.

The main idea is: first, we should close the shell company on the basis of properly handling the government stock debt of the financing platform company, and promote the pformation of entity companies into self-discipline and self-development market entities; two, the public welfare projects or businesses undertaken by the enterprises, and the government shall support them through perfecting the price adjustment mechanism, injecting capital, arranging financial subsidies, and purchasing government services, etc., strictly prohibit the arrangement of financial funds to pay for the financing of platform financing companies; three, the enterprises that are pformed by the financing platform companies shall finance and repay debts according to the principle of marketization, eliminate the implicit guarantee of the government, and realize the internalization of risks, and the debts borrowed will not be included in the government debts.

The government shall perform the responsibilities of investors within the scope of contribution, or undertake the responsibilities agreed upon by the government procurement contracts, the government and social capital cooperation agreements, etc., and shall not be liable to repay debts or provide guarantees for enterprises. Four, it is necessary to give full play to the role of market constraints, perfect the mechanism of market withdrawal and reorganization, and deal with the market debt of the financing platform companies that are defaulted through judicial procedures, and block risk conduction.

The official said that issuing local government bonds to replace stock debt is an important measure to standardize stock debt management according to law. It plays a key role in avoiding systemic risks in the field of local debt during the economic downturn.

In 2016, it continued issuing local government bonds to replace stock debt.

In 2016, the scale of replacement bonds was determined by the provincial governments on the basis of debt repayment needs and market conditions.

In order to avoid the impact of local competing bonds on the market, the Ministry of finance carries out the necessary organization and coordination of the scale, tempo and progress of issuing bonds.

The Ministry of finance will coordinate with financial institutions such as the people's Bank of China and the Banking Regulatory Commission to increase the intensity of the replacement of bonds by means of directional bonds, so as to reduce the impact of replacement bond issuance on market liquidity.