Study On The Development And Improvement Of The Government Bonds In Circulation Market Of China

In1981, China resumed the issuance of government bonds, and the government bonds in circulation market began to be established in1988.Since then, the scale of treasury bonds and bond trading volume are increasing. The rapid development of the bond market is closely related to the maturity and perfection of its two sub-markets, and the development of the bond market not only depends on the issue market, but also depends on the circulation market. With the expanding of China’s government bonds issue in recent years, the bond circulation market plays an increasingly important role. The establishment and function performance of an efficient and market-oriented bond issue market must rely on a perfect government bonds circulation market.It was an sign of our country government bonds circulation market beginning to be established that State Council approved Shenyang, Shanghai, Guangzhou, Shenzhen, Wuhan, Chongqing, Harbin,the seven cities handling the transfer business of the annual individual subscription part of the treasury bond in1988.After more than20years’ exploration and development, the bond circulation market has made a lot of the effectiveness,such as the constantly rich transaction entities, innovative trading system and rational structure of investors, but there are still some problems in the bond circulation market, such as division of the bond circulation market,lack of liquidity,unreasonable investor structure,the information opacity,less inspection, which has seriously restricted the healthy development of our bond market.This article is based on these outstanding issues,and through reviewing the course of development of China’s bond market in circulation, deep analysis of the historical background and practical reasons, and then, drawing on the successful experience of developed countries construction bonds in circulation market,and in combination of with our country specific circumstances,proposing the practical policies and recommendations to improve the development bond circulation market in the end. The author hopes that through this research can provide realistic recommendations for the development of China’s bond circulation market.This article first pointed out the background of government bonds in circulation in China market,and followed by elaborating the practical significance of the market of government bonds in circulation with the theoretical value. It emphasis on the comb at home and abroad on the bond distribution market research, and mainly reviewed Chinese scholars’ research about the problems in the government bonds circulation market and found the shortcomings.The second chapter describes the theories on our bonds circulation market, which briefly introduces the measurable indicators of the liquidity in China’s bonds circulation market, and mainly introduces the four-dimensional properties of the market liquidity of government bonds in circulation, namely speed, tightness, depth and flexibility. Besides,This chapter will introduce information transmission mechanism in our government bonds in circulation market.In the third chapter, part one reviews the historical background and the pattern of government bonds in circulation in China market development. China’s bonds circulation market has gone through four stages. In1988-1993, it was dominated by Physical counter market. In1994-1996,it was dominated by exchange bond market。In1997-2001, the Inter-bank bond market began to rise. Since2002, it was integrated between government bonds exchange market and inter-bank bond market. At present, the main cell populations of China’s bond market is three pillars of the exchange bond market, the counter bond market and the inter-bank bond market. Part two describes the achievements of government bonds in circulation market. Part three proposes the problems that seriously restricted the development of our bond circulation market are the division of the bond circulation market, lack of liquidity, unreasonable investor structure, the information opacity, and less inspection. And then deeply analyzes the causes of these problems.The fourth chapter analyze the cause of liquidity in our government bonds in circulation market. It empirically analyzes the liquidity in our country bonds circulation market from the depth and width. Although the liquidity of our government bonds circulation market has been improved, compared with developed countries and parts of Asia, the gap is still obvious.The fifth chapter is to study the successful experience of the government bond circulation market in U.S., Japan, the United Kingdom and Canada. The study found that the advantages of these developed government bonds circulation market are having a perfect bond over-the-counter market, a reasonable investor institutions, a sound market-maker system, as well as comprehensive monitoring mechanism.Finally, after studied useful experience from USA, Japan, United Kingdom and Canada, it combines with China’s actual situation, and submits some suggestion in constructing the bond circulation market, including building an integral government bond circulation market, developing inter-bank bond market, cultivating institutional investors, improving the information transparency and investor structure, strengthening the supervision of the government bonds circulation market etc.