Research On The Early Warning System Of China's National Debt Risk

As the combination of fiscal and monetary policies,the national debt policy plays an important role for a country's social and economic development.China began to issue its treasury bonds since1981,the national debt has been in a state of steady growth. Ho we ver,under the influence of the European Debt Crisis and a series of complex domestic and international factors,the scale of China's national debt continued to accumulate and the risks are gradually emerging.Based on the above background,this paper attempts to construct a risk early-warning system on the basis of the relevant areas in order to warn the risk of China's national debts.The risk early-warning system plays a guiding role for the effective management of the national debt and provides appropriate recommendations for the policies.This paper is divided into five parts,the first part is the introduction,it introduces the research background and its significance,literature review,research method,as well as innovative and weaknesses.The second part describes the three stages of the development of the national debt,there are initial period,blank period and sustainable development period,and this part also studies the characteristics of the three stage.The third part uses the international indicators to analyze the state of the risk of the national debts,this part constructs an index system to measure the risk of national debts from the aspects of the capacity in both national economy and fiscal section to carry liabilities and also on the term structure of the bond.The forth part constructs the risk early-warning system of China's national debts using AHP method.In the empirical tests on the risks of Chinese national debt in the period1990-2009,we found that the comprehensive risk is low,but the risk is high both in the capacity of fiscal section to carry liabilities and the term structure of the government bonds.The fifth part is the policy recommendations,we put forward four aspects of the policy recommendations to prevent the national debt risks such as promoting the economic development,improving the balance of fiscal payment system,optimizing the direction of bond investment and improving the level of national debt management.