Extended information All local state-owned financing platform companies are composed of three key words: "investment and financing", "local" and "platform". Basically, the basic connotation of local government state-owned financing platform companies can be determined, that is, economic entities that have close ties with local governments and engage in investment and financing business.
Generally speaking, state-owned financing platform companies mainly refer to "local investment and financing platforms", unless otherwise specified, they all refer to investment and financing platform companies specially established by local governments at all levels.
Local government financing platform company refers to an economic entity with independent legal personality, which is established by local government and its departments and institutions through financial allocation or injection of assets such as land and equity, and undertakes the financing function of government investment projects. (According to the definition in Guo Fa [20 10] 19).
Local government financing platform companies mainly take the form of local urban construction investment companies (hereinafter referred to as "city investment companies"). Its name can be urban construction development company, urban construction asset management company, etc.
Local financing platforms have also spawned some problems that need attention, mainly because the scale of debt financing has grown too fast and its operation is not standardized enough; Local governments provide guarantees in violation of regulations or in disguise, and the government debt burden is heavy. The main reason is that these places are divorced from the actual situation of local economic and social development and blindly "consume ahead".
To strengthen the control of local debt risks, we should not only further improve the restraint mechanism of local government financing behavior, but also guide local governments to effectively practice the urban construction concept of "how much money they have, how much they can do" and reasonably control the investment scale.
References:
Local government financing platform company _ Baidu Encyclopedia