Abstract: Local government financing issues have become the focus of attention under the background of new regulations on asset management. Based on the analysis of the characteristics and existing problems in the process of local government financing, this paper proposes that under the background of new regulations on asset management and financial deleveraging, significant changes will occur in our local government financing models. Traditional financing ways, such as bank credit, and other off-balance-sheet ways, like industrial fund, will be severely restricted. Therefore, while regulating local government financing behavior, the state should further construct and improve a new type of local government financing system, including asset securitization, PPP, etc., and use diversified financing channels to provide public products to ease local government financial pressure.