China's Domestic Financial Market Research

Establishing and developing domestic finance market for housing plays a vital role in the housing system reform and economic development. During the past few years, housing mortgage has been the crucial profit-growing point for domestic finance sector. More perfect housing finance market will contribute to the extensive development future for finance sector.The housing finance market can be divided into two parts: narrow sense and broad sense. The narrow one means the financing and settlement activities based on the object of individual residence or family, and the focus of housing mortgage. However, the broad one means the financing activities based on housing mortgage and other related financing activities, such as housing operation, development and construction. The main research object of this thesis is the narrow housing finance market.From international experience, the housing finance market is constituted of three levels: the first one means the primary market with the center of hosing mortgage provided by banks, and the players are the corporations and natural persons participating in the corresponding financing activities. The second one means the secondary market based on housing mortgage. The third one means a series of housing finance activities, which boost the development of the primary and secondary markets. The integration of the above markets makes up the perfect housing finance market.After a few years development, China has built up the primary housing finance market with the help of accumulation funds, in which the government sectors participate to guide and the commercial banks are main players. With the fast-growing primary market, on the one hand the banks are required to reinforce assets management and enhance the risk management of housing mortgage; on the other hand, the growth and development of the second housing finance market is encouraged, and the mortgage securization and the innovation of financial implements are imperative.On the basis of the existing conditions, the government sector should focus on loan securization. According to international operation model, banks should be allowed to issue bonds based on the guaranty of the existing creditor' s right, that help to found the housing mortgagesecondary market through establishing the special intermediary agency and trading bonds on which. We can make experiments in developed cities, and extend to larger scope even shaping national housing finance market when the normative local secondary market is built up, eventually a massive scale of mortgage securization is formed.China should positively promote the housing mortgage securization and financial instruments innovation on the basis of the housing mortgage oriented primary market, advance the growth of secondary market and reinforce the economic adjustment of housing finance, helping to form the complete housing finance market composed of three levels. By means of the integration of primary and secondary markets, as well as the government' s participation, the ideal development of finance, housing and other related sectors would be boosted, finally contributes to economy development and improvement on peoples' lives.