The Influence Of International Capital Flow On The Yield Of China's National Debt Market

In the context of economic globalization,China realized the free convertibility of current accounts in 1996.The current convertibility of capital accounts is steadily advancing,and China's financial openness has been deepened.The central leadership with General Secretary Xi Jinping as the core attaches great importance to financial opening up.At the opening ceremony of the Boao Forum for Asia,General Secretary Xi Jinping also made clear requirements for China to continue to expand financial opening up in the future.Since China officially became a member of the WTO in2001,the process of opening up China's securities market has continued to advance.On November 5,2002,the "Interim Measures on the Administration of Domestic Securities Investment by Qualified Foreign Institutional Investors" was officially launched,which opened up international capital investment in China.The prologue of the securities market,with the introduction and implementation of specific policies,foreign investment in China's securities market has increased year by year.At present,the proportion of foreign investment holdings in China's stock market accounts for about 3% of the total scale;holdings in China's bond market Its share accounts for 2%of the total scale,and its Chinese bond market holds about 8%.The proportion of holdings in the national debt market has grown rapidly in recent years,from less than2% in 2014 to the current 8%.As China's financial opening process continues,this proportion will continue to increase.This shows that China's national debt has become an important financial asset favored by foreign capital,and the influence of international capital on China's national debt market is also constantly increasing.On the whole,this article is mainly to study the impact of China's international capital flows on China's government bond yields,and to try to find out how the current international capital affects China's government bond yields.Therefore,this paper makes a theoretical analysis on the measurement of international capital flows,the influencing factors of government bond yields,and the influence path of international capital flows on China's government bond yields.Finally,by constructing a VAR model,China's international capital flows affect China's government bond yields.Analysis of the path.Firstly,aiming at the calculation of China's international capital flow,this paper summarizes the non-investment net adjustment method,direct method,indirect method and other measurement methods through literature research methods,analyzesand compares the differences,and requires the use of monthly data in conjunction with the research content of this article.With the characteristics of high-frequency data,finally,the method of measuring the increase in foreign exchange reserves minus the difference in goods trade and then subtracting the monthly actual foreign capital used to measure international capital flows.Secondly,in terms of studying the influence path of international capital on the yield of a country's national debt,it analyzes from the direct path and the indirect path.The direct path is the process by which international capital purchases government bonds to increase the price of government bonds and thereby affect the yield of government bonds.It also includes the reason for the spread between Chinese and foreign bond yields.Under the influence of interest rate parity theory,foreign capital entering and leaving China's national bond market has resulted in changes in yields.the process of.The indirect path mainly includes three aspects: first,international capital affects the national bond yield change by affecting the price level of a country;second,international capital flow affects a country's currency market and thus changes in the national bond market yield;third,international capital Liquidity affects a country's stock market and thus changes in treasury yields.Finally,by constructing VAR model to analyze the impact of international capital flow on the yield of national debt,we find that:(1)the impact of international capital flow on the yield of national debt market.(2)China's international capital flow affects the change of the national debt yield by influencing the domestic inflation;(3)China's international capital flow affects the short-term national debt yield by influencing the stock market price;In view of the above research results,this paper puts forward the following suggestions:(1)vigorously promote financial opening,formulate relevant policies to create convenience for international capital to invest in China's treasury bond market;(2)allow foreign institutions to participate in China's treasury bond futures trading;(3)improve the regulatory system of the Treasury bond market,improve risk handling capacity;(4)promote the marketization of interest rates,and enhance the transparency of policies.