Does Local Government Debt Promote China’s New Urbanization?

Local government debt played a vital role in China’s urbanization. But its influence on the new urbanization is not clear. Based on the definition of new urbanization, the paper focuses on the characteristics of local government debt and whether local government debt can meet the needs of new urbanization. The empirical research shows that local government debt promotes the urbanization rate, infrastructure supply and public products supply. But it is not conducive to the increase of urban residents’ income, which is the important component of new urbanization. The influence of local government debt on new urbanization is different at different stages of new urbanization. The suggestion is that local government should use local government debt, private capital and foreign capital reasonably considering regional and development stage characteristics, instead of debt only to accelerate the development of new urbanization.