A Research on the Causes of Credit Risk of Urban Construction Investment Bond in China

Abstract

Through the review of credit risk of local government debt in foreign countries, and the combing of relevant theoretical analysis and empirical research on the credit risk causes of municipal bonds with Chinese characteristics, this paper summarizes the theoretical results of the credit risk management practice of local government debt in developed countries, and bases on the unique local government debt problem in China, namely, urban investment debt. The causes of credit risk of China’s municipal bonds are complex and diversified, and they have gathered the problems of information asymmetry of irregularities in municipal investment financing platform companies, the contradiction between hidden guarantees and the solvency of the actual responsible subjects, etc. It is urgent to carry out a new round of innovative researches on the basis of existing researches on the future development of municipal bonds under the background of the huge total amount of municipal bonds and the difficulty of solving the downward cycle of the economy.