A Study On Interest Rate Term Structure Of China's Government Bonds

Based on the analysis of present situation of China's government bonds, the paper has carried out theoretical and positive study on interest rate term structure of China's government bonds.Firstly the paper analyses interest rate level, term structure and the present circulation situation of China's government bonds, points out the problems: not enough kinds of government bonds to form a perfect term structure; weak liquidity of government bonds market and strong fluctuation of profit rate curve; Secondly, the theory of interest rate term structure is explicated and the model of profit rate curve is established; Thirdly, postive study is carried out including; Profit rate curve is simulated with five curve model. The study shows that power curve is the best model based on present government bonds, the profit rate curve is complanate and rather low. The paper then simulates the spot rate curve with cubic curve, the conclusion is that adjustment of the profit rate structure is unavoidable.Besides the paper analyses dynamic profit rate curve, holds that the decreasing profit rate curve reflects the marginalization tendency of average profit of financial industry.Lastly, the paper discusses the feasibility of government bonds profit rate as basic interest rate of financial market, and put forward policy suggestions to put it into reality.