Development Trend, Credit Risk and Precautionary Measures of Investment Bond for Infrastructure Construction in China

After the break of worldwide financial crisis, China central bank has unfastened the control over the financing platforms of local governments. Infrastructure construction investing businesses emerges in large numbers and the investment bond for infrastructure construction grows in a great leap forward way. Although the central government implemented strict regulation measures over the bond in 2010, at the end of 2011, the local governments in many parts of China, once again, issued the bond of this kind in large scales in response to the excessive pressure of economic decline. Affected by various negative factors, such as over increased bond issuing, non-standardized establishment of infrastructure construction bond managerial companies, local government's opaque information regarding fiscal debts management and imperfect credit-increasing approaches of the bond. Currently, local governments have to be confronted with difficulties of swiftly increased debt-paying pressure and excessively accumulated credit risk. To seek out solutions, the present authors of this thesis propose their suggestions and precautionary countermeasures.