ABSTRACT
ABSTRACT: In the context of the international financial crisis and the European sovereign debt crisis, along with the rapid development of the economy, the scale of China’s local government debt is expanding, in which there are some potential risks. From the empirical research of Jiangsu Province, who locates in relatively developed east of China, it is concluded that the risk of China’s local government debt is still to be controllable in the short term, and The Local government debt will not lead to the emergence of a systemic chain reaction of the Chinese economy. However, in the mode of China’s local government debt, the facts of a large proportion of the bank loan facility, and the high dependence degree of land guarantees, make the local government debt risk increasing cumulative threats to the overall financial system and the development of the national economy. Chinese governments at all levels should attach importance to defuse local government debt risk.
