ABSTRACT
The local government debt in China is within the internationally recognized safety line when calculated according to national economic and financial strength. It is a common sense that local government debt is neither adverse nor peculiar to China. There have been new changes in the situation since the beginning of 2008. On the one hand, with the implementation of "public land leasing" policy, state-owned land transfer has been standardized gradually. On the other hand, with the impact of the international financial crisis on China, to take inflationary economic measures to cope with the crisis and ensure growth. Local governments achieve the balance between revenue and expenditure by highly relying on the central finance in an institutional environment with considerable uncertainty, which may lead the local fiscal revenue. It is imperative to notice the actual situation that the local government debt is extremely complex during the transition to the "new normal" of economy.
