Analysis Of The Economic Effects Of China's Investment In Bonds

During the period of Asian financial crisis, our export had been influenced greatly, which induced the insufficiency of effective demand. In such circumstance, our country put forward the positive financial policy by increasing the national debts investment to pull national economy growth. It is estimated that the national debts investment has increased the economy growth about 1.5%~2%, and created about 7.5 million employment in accumulation, which is important to enhance the domestic demand. However, acceleration of the economy growth by the national debts is not the final destination, the private investment must be activated to push the effective demand, which is the ultimate way to make the economy step into a long period of stable and fast growth. Since our country has not walked out of the situation of insufficiency of effective demand and deflation, the positive financial policy with national debts playing an important role should not be canceled but developed even more.The general purpose of this article is to discover the influence of national debts to economy growth by positive analysis with materials of national debts investment from the aspect of gross quantity and structure, and according to these effects it puts forward some suggestions to adjust the scale and structure of national debts investment. To realize this purpose, it requires studying the relationship between national debts and GDP as well as the concrete performance of them, and by the concrete analysis it gets the specific situation of every city about the national debts investment and gives some evaluation to them.This article can be classified into four parts, the first mainly talks about the basic theory of national debts for example it introduces the definition, type and use of national debts, then it discusses the relationship between national debts and financial deficit, at last it presents the time limit and interest structure of national debts.The second part is on the influence of national debts investment to economy growth, at first it introduces the definition of national debts investment, then analyzes the short term and long term effect of national debts investment to the economy growth and whether or not the national debts investment will crowd out the private investment, since if the use of national debts investment policy wants to come to its summit, it must pay attention to cooperate with other policies, therefore, in the last part of this chapter it describes how to combine the national debts investment policy with other positive financial policies.The third part is on positive analysis, fist regression analysis is made by using the variables like national debts scale and GDP, etc. And from the result it gets the predicted scale of national debt, then it analyzes the data of some cities by the method of principle components and gets the total scores that show the appraisal result of national debts investment.The forth part is about policy suggestions, first is from the aspect of scale, and absolute index and comparative index are recommended, second is from the aspect of national debts investment structure, and it suggests the basic equipment, education, and structure of industries should be emphasized.