Research On Status, Problems And Strategies Of China's Corporate Bond Market

Instruments of direct financing for corporations consist of stocks and bonds. Corporations abroad generally prefer bonds to stocks when making their choice, while the Chinese ones are partial to stocks, resulting in the underdevelopment of China's corporate bond market. In mature international capital market, corporation bond is an essential part and its scale is 3-10 timers larger than that of the stock. Since 1990s, the direct financing in China financing market has developed dramatically. However, Corporation bond compared with stock market and financial market is much weaker, and lags behind the progress of the market economy.First of all, having introduced the theories on the corporate capital structure in western countries, the author analyzes the necessity of developing China's corporate bond market.Then the author analyzes the causes of the underdeveloped domestic corporate bond market in view of the respective behavior of the government, the corporations, the investors and the intermediaries against the economic background at home. The author's conclusion is that it is this background that makes the government place priority on the stock market and ignored the bond market in its strategy to develop the capital market. In turn, this results in some systemic imperfection of China's corporate bond market, which further twists the behavior of the corporations, the investors and the intermediaries as participants in the market. Because of their twisted behavior, direct restrictions exist to the sound growth of China's corporate bond market.Finally, the paper summarizes that the United States corporation bond will give us a lesson in the respects of sound legal marked market behavior, out of the counter market and organization investors etc. The author puts forward practical suggestions in terms of the approach to speed up the development of this sector of the home capital market.