A Research On The Investment Of China's Bond Market

Chinese financial system is existing problems of unbalanced development and low proportion of direct financing during its long time development. In direct financing, bond financing lags behind other financial markets. At the end of 2006, China's loans, the total stock market value of stocks and bond reserves respectively reached 22.5 trillion yuan, 10.6 trillion yuan, and 8.8 trillion Yuan, with 2006 GDP ratio of 1.08, 0.50 and 0.42 respectively. The underdevelopment of direct financing situation results in the gradual accumulation of bank risk and the impact of the financial system stability. On the other hand, it impacts on financial markets in the breadth and depth of the expansion and extension of the market, limits the function of the market and improves the efficiency of progress. This is an objective requirement for China to develop the bond market.In recent years, the Chinese government attaches great importance to the development of the bond market. The National Financial Work Conference had been made the integral aim of accelerating the development of the bond market on January 2007. The seventeen national reports also pointed out that "to raise the proportion of direct financing through various channels and develop various kinds of financial markets." Research on the bond market has a very important practical significance.For above, this paper constructs two bond market models based on mathematical statistics and uses these models for empirical analysis, basing on the combination of the theoretical research and empirical research and connecting with China's actual development of the bond market.This paper first briefly introduces the basic theory of the bonds; and then analysis the influence of subprime lending crisis to bond market and investigate the causes of subprime lending crisis simply; then the author analyses China's bond market that focuses on the bond market, corporate debt market and policy financial bonds market and establishes two models which are Multiple Linear Regression Model and Factor Analysis Model based on the data of bond investment market between 1996 and 2006; at last, the author puts forward some suggestions to develop China's bond market in this paper.That is the main content of my thesis. Whereas bond market is so important, but bond as a debt security is very different with stock, so we have to find a different way to develop bond market. Restricted by the author's capability, there must be some defects in this thesis. If you have read my thesis, welcome to make your wise advice to me and thank you very much.