An Empirical Study On The Scale Of Chinese Government Bonds:1979-2003

China's government bond expands quickly, whose scale influence the Economic profoundly. Hence it is concerned by the whole society gradually. The paper combines the normative analysis and the positive analysis together, using qualitative analysis and quantitative analysis. The research is focused on such aspects: ①Revealing the reasons for China's government bond scale expanding through analyzing China's practice. ②Reviewing the government bond scale by setting up the cointegration equation model. ③Putting forward the relevant policy recommendations to reduce the risk of China's government bond. The paper points out that under the macroeconomic background, the monetary policy not working and the government implementing active financial policies, the shortage of the China's infrastructure made up the market. The government bond scale works under low financial risk because of a faint effect of crowding out, the strong capability to paying off the debt and the low potential financial risk. Through Granger causality test, the paper chooses the GRANGER causes. So the paper sets up the cointegration equation model and Error Correction Model. The models indicate that the key factors to influence the scale of China's government bond scale are GDP increment and scale of personal deposits. The two factors alter with the government bond scale in the same direction. That means the debt scale is reasonable and can promise the sustainable development of national Economy. Though the risk of China's government bond is low currently, to be cautiously, the paper puts forward the relevant policy recommendations controlling the scale of China's government bond on the basis of the summary above.