Ⅴ．Conclusion

In the process of rule of law of the central-local relations, we need to pay attention to the connections of each system and to preventing the rise of new problems, i.e．the existing financial control mechanism on the local government debt may no longer be effective．For this purpose, we need to find an alternative control mechanism．The author believes that financial market investors' behavior selection may have an effect on local government debt．The major premise is to carry out the revision of the Budget Law, giving local governments the right to independently issue bonds, and define its legal responsibility to achieve the “double autonomy”of exercising power and bearing responsibilities through the financial market mechanisms.

When the national governance is too concentrated in the central level, the more powerful the central government is, the more responsibilities it will take; On the contrary, the power of the local is pressed, it is impossible for them to take responsibility independently at the same time．“The division of functions and powers between the central government and the local governments should be in accordance with the nature of matters, and it should be regulated by the Central People's Government Commission, to make it conducive to national unity and adjust measures to local conditions”, an expression of division of powers in the Common Program of the Chinese People's Political Consultative Conference, which played the function of the interim constitution between 1949 to 1954．But the later four versions of the Constitution of the People's Republic of China no longer contained the division of power.^[1]Although this is just the “simple”principle, this provision is not out of date today.

After analyzing the reasons that France and Spain had walked from its flourishing period to decadence and the rise of Netherlands and UK in the 17th century, North and Thomas, the new economic historians, keenly point out that the measures taken by a country facing the challenge of fiscal pressure will determine the rise and fall of a country's economy in the long time.^[2]Perhaps China is facing it now．For the local debt, which is a difficult and pressing problem, if China could do some positive reforms in fiscal system, these reforms will decide the direction of this country, and its sphere of influence will not only be confined in the field of fiscal or financial system.

—Translated by WU Qiaofang from
Legal Science (《法学》), Vol.4, 2015

[1] The Constitution of the People's Republic of China stipulates “The division of functions and powers between the central and local state organs is guided by the principle of giving full scope to the initiative and enthusiasm of the local authorities under the unified leadership of the central authorities.”

[2] See Douglas Noth, Robles Thomas, The Rise of the Western World, trans．by Li Yiping, Cai Lei, Huaxia Press, 1994, pp.167-177.