Local Government Debt Risk Evaluation Based on Metabolic GM (1, 1) Model

Considering of the shortage of the limits of the ordinary GM (1, 1) model, a metabolic GM (1, 1) model is established to predict the amount of the outstanding debt of local government and GDP (Gross Domestic Product) throughout the years. And then debt ratio is used to evaluate whether Chinese government´s financial position is healthy, revealing the balance of government debt at the end of 2015 accounts for more than 60% of GDP, reflecting local government debt risk in a dangerous situation. Some measures should be taken to control the local government debt risk.