Research On Market Maker System Of Government Bond Market Of China

The modern Chinese government bond market had been initiated in 1981. With more than twenty years development, the government bond market has become one of the most important parts of the economic system of our socialism market economy. In recent years, the government bond market has experienced a rapid and healthy growth, numbers of new initiatives are developed, the government has made great effort to improve the government bond market regulation environment in terms of control and transparency. The government bond market has made great contribution to the national economic development as well as in macroeconomic control.In the primary market, the government has increased its government bond issuing. The book-entry based government bond has also increased its share among the total issuance. The book-entry based government bond is fully based on market auction, which including the single-price based auction, multi-price based auction and the mix of the two. The Ministry of Finance has been issuing the bench mark bond constantly. The government bond syndication system has also been established. Moreover, the issuance has been increasingly systematic and transparent. The development of the primary market is rapid and healthy.Now, the secondary government bond market is formed by the OTC market which including the inter-bank market and the commercial bank counter market, and the Exchange market which including the Shanghai and Shenzhen Stock Exchange. The trading products including cash bond, open-end repo, closed-end repo and bond forward contract. Both markets adopted the clean price pricing method. In recent years, although the secondary government bond market is developing quickly, there are still some problems, the most important one is that the intersected of the two markets and the lacking of liquidity.After established in 1997, the inter-bank market has gained great achievement, and now has become the main issue and trading place of the government bonds, financial bonds and others. In July 2001, PBC established the market maker system elementarily to enhance the liquidity of the inter-bank market.The dissertation can be divided into five parts: Section one and two introduce the researching background, the meaning of the research, the research methods, define the relative concepts in the dissertation, brief western theories of market maker system etc. The third section compares the running of the market maker system in different countries. The fourth section four analyzes the running of the market maker system in the inter-bank market and finds the problems which are still existent. In the fifth section, the author brings forward some new suggestions to the development of the market maker system with the aim of doing some benefits to the construction of our government bond market.