Study On The Problem Of Corporate Bond Financing

Since 1990s, directing financing in the financial market developed rapidly, but corporate bond financing, as an important part of direct financing, obviously lagged behind stock financing. And its development lagged behind government bond and financial bond in the bond market. This status quo contradicts the trend in western countries where bond financing is the major part of external financing for corporations and it seriously restricts the development of capital market in China. Based upon the views of system and market, this thesis paper studies and discourses the issue. We believe that restriction from government regulation is the root cause for the backward development of corporate bond financing, and the slow growth of market is an important factor that restricts its development. The work of promoting its development should be carried out step by step. In the short run (before 2005), policies and regulations should be adjusted and changed. In the long run (2005-2015), corporate reform, market cultivation, and risk prevention and control should be strengthened. According to the requirement of marketization, legalization, and standardization, conforming to international trend, corporate bond market with Chinese characteristics should be developed step by step. The basic conclusions are as follows:1.Restriction from government regulation is the fundamental reason that resulted in the backward development of corporate bond financing in China. In order to help issuing government bond in the past few years, corporate bond financing was strictly limited. Therefore, systemic innovation should be given first priority. Restrictions should be loosened and supervision should be strengthened.2.SubjectSve and objective situations of corporations are the objective factors that limit the development of corporate bond financing. From the first part of 1990s, to help promote SOE reforms, SOEs were encouraged to go listed in the stock market. Thus, many listed companies laid great emphasis on stock financing, and paid little attention to bond financing. While many non-listed companies had no ability to issue corporate bond.3.Slow reform and development of relevant systems is the core factor that restricts corporate bond financing. It is mainly demonstrated in the non-market pricing of benchmark interest rate, poor settlement clearing system and lagging debt payment guarantee system.4.According to the requirement of marketization, legalization, and standardization, conforming to international trend, corporate bond market with Chinese characteristics should bedeveloped step by step. In the short run, on the one hand, restrictions on issuing subjects and issuing conditions should be unfastened to promote the development of corporate bond financing. On the other hand, the functions of intermediate organizations should be improved to enhance social supervision. In the long run, bond product innovation should be speeded up, mature investors should be cultivated, reform of corporate property rights should be pushed forward, market benchmark interest rate should be constructed, parking and clearing system should be set up, off-the-board market should be promoted, dealing system should be ameliorated, market maker system should be started, and debt payment guarantee system should be established.