The degree of local financial risk depends on the risk factors and the degree of harm, and depends on the strength of local finance, that is, the ability to resist risks. Due to the great differences in the level of economic development in different regions of China, the degree of local financial risk and the ability to resist risks are also different. In the provinces with relatively backward economic development, the problem of local financial risks is relatively prominent, and the forms of risks are diverse; Provinces and regions with relatively high economic development level have relatively strong ability to resist financial risks, and the forms of risk are relatively concentrated. According to our investigation, local financial risks mainly take the following forms: According to the risk matrix of Hana Polackova, an economist of the World Bank, government debt can be divided into two categories: direct government debt and contingent government debt. The former refers to the responsibilities and obligations that the government cannot avoid under any circumstances; The latter refers to the responsibilities and obligations that the government must undertake and perform under certain conditions. These responsibilities and obligations are all included in government functions, but in the form of expression, some are explicit and some are implicit. Therefore, government debt can actually be divided into four categories: explicit direct debt, implicit direct debt, explicit contingent debt and implicit contingent debt, and there are four corresponding government debt risks: explicit direct debt risk, implicit direct debt risk, explicit contingent debt risk and implicit contingent debt risk.

1. Explicit direct debt risk

The explicit direct debts of local finance mainly include debts arising from refinancing of national debt, debts arising from wage arrears, grain losses and township financial debts.

(1) The national debt loan funds will be implemented from 1998. Issued by the Ministry of Finance and lent to local governments, it is mainly used for local infrastructure construction, and the part directly used and repaid by local financial departments constitutes the explicit direct debt of local finance. Judging from the areas we investigated, the area with the least income from convertible bonds in 2000 1998 was Jiangxi Province, which was 2,888,840,000 yuan. The largest is Shanghai, which is 5,406.55 million yuan.

(2) Debts arising from wage arrears. In recent years, it has become a common phenomenon in China that administrative institutions are in arrears with employees' wages. For local governments, wage arrears are undoubtedly explicit direct debts. According to our investigation, as of June, 200 1, 10, 68 counties and cities and 15 16 townships in a certain province were in arrears with wages to varying degrees, and the amount of arrears was 2 billion yuan.

(3) debts arising from food losses. Food prices in China have long been controlled by the government. Since 1979, the grain purchase price has been continuously raised to benefit farmers. At the same time, considering the interests of urban residents, the selling price of grain has remained basically unchanged for a long time, resulting in the upside down of food prices and a heavy financial burden. So far, grain enterprises have accumulated losses of 240 billion yuan (Wu Jinglian, 200 1). According to our investigation, in May of 1998, some provinces and regions increased their grain losses by 94 1 100 million yuan, and after 1998, there were still new losses that were not counted. Grain losses also amounted to 2.9 billion yuan. Although the higher-level finance has given policies such as increasing the total amount of provincial grain risk funds, increasing funds, and allocating subsidies for the quality difference of central grain reserves, some provinces have huge losses and great difficulty in digestion, which has caused hidden dangers to the smooth operation of finance.

(4) township financial debt. From the perspective of the government, the problem of local fiscal debt is mostly at the county and township levels, especially at the township level. Due to the poor economic foundation and fiscal revenue and expenditure, some towns and villages have no room for manoeuvre in fund allocation, some towns and villages have difficulties in paying their debts, and some are simply insolvent. According to our investigation, by the end of 2000, the explicit direct debt of a province was 654.38+05.66 billion yuan, of which two thirds was county and township debt. The total debt of villages and towns in this province accounted for 79.2% of the fiscal revenue of villages and towns in that year, and the average debt of each village and town reached 188438+00000 yuan. The debts of some cities, counties and towns reached 100%. A city in another province has 1 14 townships, and the average debt is as high as105000 yuan. The debts of some towns and villages exceed 2-3 times the available financial resources at the corresponding level. The debt of local finance is too high, which makes local government agencies always operate in a "tight" environment. On the one hand, the consequences lead to endless charges, on the other hand, it also produces various risks.

2. Implicit direct debt risk

Implicit direct debt mainly refers to the debt formed by the gap of social security fund. How big this gap is, people have different opinions. Judging from the situation of the provinces, municipalities and autonomous regions we investigated, the gap of social security fund of 200 1 is about 400-300 million yuan. The serious shortage of funds, coupled with the inability to fully recover historical debts, will bring greater risks to social security expenditures. Especially, due to the establishment of modern enterprise system, the bankruptcy of enterprises and the increasing burden of pension and medical expenses caused by the aging population, it has brought great uncertainty to the balance of social security revenue and expenditure and the maintenance of moderate balance, which will directly cause hidden dangers of social stability, and finance will inevitably bear the final payment and risk because of the bottom-up mechanism.

3. Explicit contingent debt risk

This mainly refers to the debt formed by the government's public commitment and guarantee, including the national debt lending funds guaranteed by the local financial department and transferred to local enterprises and institutions. If these debts can be repaid on time, there is no need to bear the financial burden; However, if the debtor fails to repay, the finance will bear joint and several liability and eventually become a financial debt. According to the survey, the debt guaranteed by a provincial government accounts for 14.4% of the total debt, among which the debt guaranteed by villages and towns accounts for110.2% of the total debt, which means that 84% of the guaranteed debt will be converted into the real debt of the government.

4. Hidden contingent debt risk

This mainly refers to the debts that the government does not promise and guarantee, but once these debts are in crisis, the government will inevitably intervene from the perspective of public interest. Government intervention means that the government should invest money and take responsibility. From the perspective of local finance, this debt is mainly reflected in the failure of state-owned enterprises to make up for losses and the assistance to supply and marketing systems and rural cooperative foundations.

In recent years, various investment and financing organizations, such as rural cooperative foundation and supply and marketing cooperatives, are very active, and the problems of illegal financing and high-interest lending are quite serious. Many of them have been converted into new debts of local governments, and the resulting financial risks are difficult to quantify and estimate. The risks of local financial enterprises are financial or sexual. Once there is a payment gap, the government will inevitably bear part of the repayment responsibility, thus forming a hidden financial risk. At present, the contingent risks of local banks, trusts, credit cooperatives and other financial institutions are first manifested as non-performing assets, which are not only large in amount and high in proportion, but also on the rise due to the increasing arrears of interest by enterprises. Rural credit cooperatives and rural cooperative foundations have the highest rate of non-performing assets. In a province we investigated, the NPL ratio of rural credit cooperatives in 200 1 year was as high as 54.9%, and that of rural credit cooperatives in some cities was as high as 75.6%, which greatly exceeded the warning line. The non-performing assets of local financial institutions in a city reached 654.38+05.443 billion yuan. The non-performing assets of these financial institutions are formally manifested as the operational risks of financial institutions, which may be resolved through the improvement of bank operations. However, if the situation deteriorates further and breaks through a certain critical point, the operational risks of banks will be transformed into financial risks. For example, in the case of a rural cooperative foundation, depositors open banks. In order to stabilize the local political and economic order, provincial governments generally promise to apply to the central government for special refinancing (the province we investigated specifically applied for loans to pay the personal deposits of rural cooperative foundation depositors is 850-600 million yuan). However, this part of the loans are basically left in dormant accounts, and the township finance has no repayment ability, and the funds recovered from various places are very small. All the repayment pressure will inevitably be passed on to all levels of finance, which has brought great pressure to local finance.

In addition, although the funds raised by local governments through borrowing have played an important role in improving urban infrastructure, maintaining social stability, promoting agricultural and rural economic development, and stimulating regional economic growth, the resulting repayment pressure has also brought certain risks to local finance. The risk of fiscal revenue is mainly reflected in the financial shortage, and its inherent significance lies in the difficulty in balancing the recurrent budget. Due to the weak growth of fiscal revenue and the single income structure, there is a phenomenon of "false income", which makes it difficult to pay the statutory expenditures arranged in the budget in full and on time. The main performance is as follows:

First, the proportion of fiscal revenue to GDP is low, and the financial resources available to local governments at all levels are very limited, and their ability to resist risks is very low. For example, from 1994 to 2000, the fiscal revenue of Heilongjiang Province increased by 13% every year, which was roughly equivalent to the GDP growth of the whole province in the same period, but compared with the economically developed provinces, the fiscal revenue accounted for a lower proportion of GDP. According to the general budget revenue, the proportion of fiscal revenue in GDP has been hovering between 5-6%, which is lower than the national average. The proportion of local fiscal revenue is small, which makes the gap between local fiscal revenue and fiscal demand of that year increase year by year, the contradiction between revenue and expenditure becomes increasingly prominent, and the ability to resist risks is greatly weakened.

Second, the tax source structure is single, the development of "resource-based" finance is limited, and the growth of total income is slow. In some places, finance has been influenced by geographical location and natural conditions for a long time, and the tax source structure is relatively single, which leads to the slow growth of total revenue. For example, the financial revenue of Heilongjiang Province comes from natural resources, among which oil, coal, timber and grain are the most prominent, accounting for nearly half of the province's industrial and commercial tax revenue, which has been maintained at around1300 million yuan and has never increased. In particular, Daqing crude oil exploitation is constrained by resources, and the output will be reduced by 1.20- 1.5 million tons every year, and the resource tax will also be reduced by more than 30 million yuan every year, which seriously affects the provincial financial operation. In addition, due to the implementation of the "Natural Forest Protection Project", the forest area only reduced production by12.29 million cubic meters in 1999, which had a great impact on the finance of Yichun and Daxing 'anling, which feed on forestry.

Third, the phenomenon of "false collection" of local finance is serious. Some banks and enterprises have inflated fiscal revenue, which leads to inflated profits and real losses, which leads to "virtual balance and real deficit" of local fiscal revenue, which increases the moisture of local fiscal revenue and further increases the risks faced by the fiscal future. There are still some towns and villages whose budget revenues are not true, and there is more water in one income. According to a typical survey, a town in Yichun City, Jiangxi Province1000 in 1999 has achieved a total fiscal revenue of 745 1000 yuan, of which bank loans and extra-budgetary funds paid 1682000 yuan; The tax task of a town in Gao 'an City is 465,438+million yuan, and the actual tax source is only 2.8 million yuan, with a gap of 1.3 million yuan, all of which are made up by land inventory income, family planning fines and township overall income. In order to complete the tax assessment indicators, such towns and villages take various forms of tax advances, forcibly apportion tax tasks, and even spend money to "buy taxes" and the government "idle", and the tax authorities collect taxes for the next year. , increased the moisture of township fiscal revenue, a serious lack of available financial resources. The expenditure risk of local finance is the risk of partial loss of basic functions of local finance due to insufficient income. For example, the statutory expenditures of government departments, such as salaries, office expenses, education, health, agriculture and public security law, cannot be paid in full and on time, which seriously affects the realization of government functions and the stable operation of society.

Due to the constraints of economic scale, quality, structure and system, although the growth rate of fiscal revenue in some places is small, it is necessary to provide necessary financial guarantee for government operation, various reforms, economic development, political and social stability, especially in the process of deepening reform and social transformation, such as strengthening the basic position of agriculture, deepening the reform of grain circulation system, improving the local social security system, adjusting and raising the wages of civil servants and employees, and increasing the financial support for the population year by year. Therefore, the financial burden is too heavy, the pressure of increasing expenditure is high, the rigidity is strong, and the contradiction between revenue and expenditure is prominent, which is the concentrated expression of local financial expenditure risk. The deficit risk of local finance mainly comes from the county and township levels. Due to the limited fiscal tax sources in counties and townships, the income growth is slow, while the recurrent expenditure increases rigidly, and the contradiction between fiscal expenditure and income accumulates to a certain extent. For example, from 65438 to 0998, there were 34 counties and districts in Jiangxi Province with deficits of 485 million yuan. 200 1, 74 deficit counties, deficit105.8 billion yuan. Inner Mongolia Autonomous Region 10 1 counties, 16 is 1990 counties with a deficit of 48 million yuan; In 2000, it was 47 million yuan and 370 million yuan respectively. There are 33 counties with a deficit of 200 1 year in Fujian province, including 4 counties with a deficit exceeding 50 million yuan. County and township finance is the foundation of finance at all levels, and the quality of county and township finance is directly related to the foundation of the whole local finance operation. County and township finance deficit, the deficit amount is getting bigger and bigger, and began to spread to the next level, which will inevitably lead to the deterioration of the whole local financial situation and the accumulation of financial risks.

The above analysis shows that although the local financial risk is directly manifested as the imbalance of fiscal revenue and expenditure, this imbalance will affect the social and economic development, the authority of governments at all levels and the stability of grassroots political power. Therefore, the local financial risk is not only an economic issue, but also a political issue, and effective measures must be taken to control and resolve it.