On the afternoon of the 5th Beijing News Express, the Information Office of the State Council held a briefing. Huang Shouhong, the head of the drafting group of the Government Work Report and the director of the Research Department of the State Council, interpreted the relevant information of the Government Work Report. Some journalists asked: this years Government Work Report proposed measures such as raising the deficit rate, expanding the fiscal deficit, large-scale tax reduction, whether this will lead to a substantial increase in government debt, at the same time, in order to grow steadily, will it lead to a sharp increase in hidden debt and bring about financial risks?
Generally speaking, the debt of the Chinese government is not high at present, Huang Shouhong responded. By the end of last year, governments at all levels had debts of more than 330 million yuan, with a debt ratio of 37%. What is this concept? It is lower than the EUs 60% warning line and the debt ratio of major developed economies and emerging market countries. Among them, the debt ratio of the central government is a little more than 16%, and that of the local government is a little more than 20%. Together, it is about 37%. Some people in society are worried about the problem of local government debt, mainly because they have no idea about the hidden debt, and there are various kinds of data. Over the past few years, we have taken measures to control the implicit debt of local governments. Last year, in the three major battles to guard against and resolve major risks, we made it an important task to guard against and resolve local government debt risks, especially implicit debt risks, and put forward clear requirements. We have introduced a series of policies such as accountability for irregular borrowing by local governments. It should be said that the impulse of local governments to expand implicit debt has been greatly curbed, and the momentum of the rise of implicit debt has been curbed.
Huang Shouhong explained that under the current economic downturn pressure, effective investment should play a key role. In order to achieve innovative development, improve peoples livelihood, promote industrial transformation and upgrading, and develop new momentum, effective investment is indispensable to maintain a reasonable growth of investment. Fixed asset investment grew by 5.9% last year, with a lower growth rate after deducting price factors. This years report on the work of the government proposes some policy measures to expand investment, namely, to bring investment back to a reasonable level of growth.
Is it possible for local governments to rationally expand effective investment without money? In the current situation of financial difficulties in some localities, it is necessary to borrow money appropriately when there is a shortage of money and work hard. At this point, the attitude of the central government is very clear. It is possible to borrow money, but we should adopt a standardized way, that is,open the front doorandblock the back door. Huang Shouhong said, how to open the front door? According to the government work report, the scale of local government special bonds has increased by 800 billion yuan this year, and the debt limit of local government has also been raised. It is proposed to continue issuing a certain number of local government replacement bonds in order to alleviate the interest burden of local government stock debt. We should not only take these measures to open the front door and let local officials, but also block the back door, standardize the local government debt financing mechanism and firmly control the hidden debt risk. At present, the growth momentum of implicit debt has been curbed, and the problem of stock debt is also being solved. The measures I mentioned earlier are also conducive to resolving stock debt.