The Asian Bond Market Development Research

The Asian financial crisis has taught Asian economies a lesson that the regionalcapital market is still far from being mature, and the imperfection of the regional bondmarket constituted a major cause that finally led to the crisis. Despite of having theworld’s biggest foreign reserves, Asian countries poured a good number of the foreignreserves into well-developed financial markets. Nevertheless, once a regional bondmarket is established and converts the huge amount of local savings into productiveinvestment, Asian economies’ ability to deal with crises will be improved afterreducing their dependence on dollar-denominated assets and banking institutions.Therefore it is utterly crucial to promote the building and development of regionalbond markets.The thesis firstly summarizes the development of Asian bond market and theelements that have underpinned its growth. And then it sets forth the challenges that itis confronted with by focusing on three aspects, namely the present status of thesub-markets, the adoption of denominated currency and infrastructure construction. Inthe end, the thesis brings forward several strategies for China to better participate inthe development of the Asian bond market.