Research On The Scale Of China’s National Debt And Its Influencing Factors

In the background of the Europe debt crisis, issuing reasonable and moderate government bonds will be of great theoretical and practical significance to China. On the basis of relevant concepts and representative viewpoints at home and abroad on scale of national debt, and doing a study on it, which will lead to coming up with moderate scale and its influencing factors to national debt. This paper adopts research methods by combining normative analysis and empirical analysis, qualitative analysis and quantitative analysis from the following aspects:Part Ⅰ:This part is the introduction of the background and significance of this article, analyzing the history and current situation of China’s national debt scale briefly. Besides, explains the reasons why choosing the debt scale and factors affecting scale of our national debt as theme study. And then, shows the method and frame of the research. In addition, points out the difficulties and possible innovations of this paper.Part Ⅱ:Literature review is mainly from three angles presenting. Firstly, related definitions, theoretical summaries and economic effects on national debt are reviewed; Secondly, literature on moderate debt scale is summarized. Thirdly, sum up the influence factors of national debt; Last, it’s concluded that the current study of this topic still possess some drawbacks.Part Ⅲ:From the perspectives of absolute and relative value analyzes our national debt. The indicators show that the fiscal expenditure, debt service, fiscal revenue, national debt accumulated balance, and GDP affect the scale of national debt. Then we can find the problems of debt and evaluate our optimal debt-scale, which paves the way for the following theoretical and empirical model.Part Ⅳ:The mathematical model of moderate scale debt is derived. Research transmission routes about GDP and other factors on the effect of government debt will be referred. According to internationally accepted three relative indicators, combined with facts of China’s economic development, moderate debt scale will be got by correcting and building up a theoretical model. Finally, we will obtain the scale range upon the ability to bear the national economy and the financial capacity of the debt scale.Part Ⅴ:Establish econometric analysis of major factors affecting issuing national debt. GDP, debt service, fiscal expenditure, national debt accumulated balance and outstanding household deposits will be picked as independent variable. Through empirical model, we will find the most important factor which affects the debt scale, and explain the reasons and internal mechanism.Part VI:Conclude and put forward policy recommendations by means of theoretical and empirical analysis. To begin with, the national debt scale is out of the modest bounds; Furthermore, we will look out for the factors in order that the debt scale will be controlled in a reasonable range; Last but not least, appropriate policy recommendations to reasonable scale of the national debt will be proposed.