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Study on Early-warning Mechanism of Local Government Debt Risk

Tengfei Mao

(Fuzhou University)

Abstract Series of audit announcement in our country show that the amount of local government debt is rising year by year. It becomes a major hidden danger affecting national economic security.How to manage and control local government debt risk is the hot spot focused by all sectors of society.The paper analyses local government debt risk early-warning theory, chooses city A as a case, and designs risk early-warning index system.Then through introducing the extension matter-element theory and AHP, the paper builds the local government debt risk early-warning model.At the same time, the paper analyses the debt situation of city A and offers some policy sug-gestions.The study indicates that the debt risk of city A is in the medium and has the trend of higher risk.So the paper gives the three advice of managing the debt, normalizing debt, rationally using debt and effectively repaying the debt.

Key words Local Government Debt;Debt Risk;Influencing Factors;Risk Early-warning;Extension Mat-ter-element

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