Journal of Commercial Law Review
2022,VOL.6,NO.1,45-48
DOI:10.47297/wspjclrWSP2516-249708.20220601
Prospects for Legal Regulation of China's Treasury Bond Issuance——From the Perspective of National Debt Legislation Jiaqi Xue
Northwest University of Political Science and Law,Xi'an Shaanxi,710000,P.R.China
ABSTRACT
The issuance of treasury bonds is the basis and starting point of the
operation of treasury bonds.However,there are many deficiencies in the
current legal regulation on the issuance of treasury bonds.Therefore,this
paper calls for the formulation of a basic law on treasury bonds"National
Treasury Bond Law"to solve the problem of treasury bond issuance.
various deficiencies in it.
KEYWORDS
National debt issuance;National finance;National debt legislation
National debt,also known as national public debt,is a creditor-debt relationship formed by the state based on its credit and by raising funds from the society in accordance with the general principle of debt.The resumption of issuance of treasury bonds has gone through decades of development.From more than4billion yuan in1981to45.3trillion yuan in2019,the issuance scale of treasury bonds has repeatedly increased.In his article"The Crisis of the Tax State"published in 1918,Joseph Alois Schumpeter put forward the theory of the taxation state crisis.In a broader field, because government operations need financial expenditure as support,the country's financial expenditure is excessively inflated,and tax revenue has been unable to meet the government's normal financial expenditure,which will eventually lead to the country's excessive borrowing.Most modern governments are debt governments and deficit finance.[1]
To solve the government debt,on the one hand,it is necessary to rely on economic growth and increase government revenue,and at the same time,it is necessary to reduce government expenditure
and regulate government behavior.This requires the national debt law to play a role to ensure the reasonable application of national debt funds.The healthy development of the treasury bond market is inseparable from the improvement of the legal environment of the treasury bond market.Through laws to regulate the issuance,trading and settlement of treasury bonds, standardize treasury bond management,enhance the transparency of the treasury bond market, coordinate the conflicts between various departments in treasury bond issuance,and prevent Different departments issue treasury bonds in violation of regulations for their own interests, correctly handle the contradictions and disputes in the issuance and transfer of treasury bonds, promote the smooth development of the treasury bond market,and provide a good legal environment for the smooth development of the treasury bond market.
Jiaqi Xue 46
1The Basic Theory of National Bond Issuance
1.1National debt
Treasury bonds are bonds issued by the state.They are a kind of government bonds issued by the central government to raise financial funds.They are credit and debt certificates issued by the central g
overnment to investors and promise to pay interest and repay the principal at maturity in a certain period.John Maynard Keynes pointed out:"Leveraging has little impact on the economy and society.It is the best means to make up for fiscal deficits and a powerful measure to drive economic growth.Government borrowing has productive characteristics.For example,it is used for investment in the construction of railways and roads.It will promote economic development."[2] Yang Zixuan believes:"National debt is mainly used to make up for fiscal deficits for economic construction and for specific purposes."[3]And Montesquieu emphasized that national debt has no benefits,only harm:"These are the evils of public debt,and I have not found it to be of any benefit." Adam Smith,in"An Inquiry into the Nature and Causes of the Wealth of Nations",listed the evils of government borrowing.Without knowing thrift,borrowing funds raised for unproductive spending will lead to a slowdown or recession in the country’s economy.”
1.2Issuance of national debt
The issuance of treasury bonds refers to the process in which the Ministry of Finance promotes treasury bonds to the primary market and is subscribed by individual or institutional investors.It is the starting point and basic link of the operation of treasury bonds,and the premise of using treasury bonds for macro-control.It affects the circulation and repayment of treasury bonds..The quantity and scale of t
reasury bond issuance should take into account the repayment affordability of the government and residents,and the term structure of treasury bond issuance should also be considered to avoid a debt repayment peak.circulation,etc.The issuance of treasury bonds involves the functions of various departments of the central government.In the current treasury bond issuance,the Ministry of Finance plays a leading role.The core of treasury bond issuance is the way through which treasury bonds are sold to investors.The issuance of treasury bonds involves issuers, intermediaries and investors.They have common interests and different interest demands,which need to be regulated and adjusted by law..There are various ways of issuing treasury bonds,which are divided into two categories:direct issuance and indirect issuance,based on whether there are financial intermediaries involved in the sale.Direct issuance generally refers to the direct allocation of treasury bonds to specific large financial institutions by the Ministry of Finance on behalf of the central government.Indirect issuance is divided into four categories including agency sales, underwriting underwriting,bidding issuance and auction issuance.In addition,the issuance of treasury bonds is related to national public finance and budget issues,and the state authority should supervise and approve the issuance of treasury bonds.[4]
2The issuance system of national debt from the perspective of national debt legislation
The issuance of treasury bonds is the starting point of the treasury bond market and the core link of th
e treasury bond market.In order to meet the normal demand and effectively reduce the risk of national debt,the issuance of national debt must be restricted by the legal system,and the procedures and links of the issuance of national debt must be regulated.In order to scientifically issue government bonds,the United States has established a special agency to monitor and forecast the national debt market,and to measure the appropriate size and structure of national debt.Due
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47
to the lack of the tradition of finance under the rule of law in my country,strict legislation must be made in the issuance of government bonds,the scale and procedures of issuance of government bonds must be regulated,and relevant responsibilities should be clarified.It is undeniable that there are obvious deficiencies in the legal system of national debt issuance in my country at the current stage,which are mainly reflected in:the lack of a basic law in the legal regulation of national debt, the scattered legal regulation on national debt,,The decision-making body of national debt issuance is not coordinated,and there is a lack of clear supervision of national debt issuance.
In the final analysis,all the problems of national debt in our country are the lack of the"National Debt La
w".China urgently needs a special national debt law to rationally supervise national debt,so that the national debt market can form a complete and supporting legal system,so as to strengthen the legal regulation of national debt.
The treasury bond market needs a sound legal system for treasury bonds,so as to regulate the issuance,trading,liquidation of treasury bonds and the behavior of the subjects involved in the country's national debt legal system is extremely imperfect,which seriously restricts the development of the national debt market.It is not in line with the legal system and transparent concept of government debt,and is not conducive to the active role of the national debt market,which restricts the efficiency of the national debt market.
To formulate the National Debt Law,it is necessary to integrate various scattered laws and regulations,comprehensively regulate the issuance,circulation,use,management and repayment of national debt,clarify the rights and obligations of all parties involved in the national debt market, and set restrictive means.The National Debt Law must stipulate the principles,scale,structure, procedures,investment use,project acceptance,effect inspection,and legal responsibilities of issuing national debt,and improve the national debt market and bond market management,so as to ensure the realization of the purpose of issuing national debt.At the same time,we will learn from the experience o
f foreign national debt legislation to promote the national debt market to be in line with international standards.[5]
In formulating the National Debt Law,the principles of openness,rule of law,democracy and marketization should be adhered to.One of the main tasks of the government is to provide the public with public goods and services.The amount,interest rate,duration and target of the issuance of national debt should be announced before the issuance of national debt.According to the principle of fiscal law,the issuance of treasury bonds should also meet the conditions stipulated in the future treasury bond law.The starting mechanism for the issuance of treasury bonds should also follow the principle of parliamentary resolution,and widely listen to the opinions of all parties.The issuance of treasury bonds should also follow the principle of marketization.
The formulation of the National Debt Law can learn from the relationship between the European Central Bank and the Ministry of Finance to solve the current problems of unclear and inconsistent issuers of my country's national debt.European law stipulates that the Ministry of Finance announces a detailed government bond issuance plan to the society at the beginning of each year according to the current fiscal budget,and then the central bank is responsible for the specific operation as the issuance agent of government bonds.Even if the legislation does not carry out legal transplantation,a single high-
level,unified legal norm is enough to solve most of the current problems of unclear issuers.
for the saleThe formulation of the National Debt Law should rationalize and legalize the supervision of national debt by various agencies.The supervision of the national debt market should follow the regulatory objectives,reasonably allocate regulatory power,and implement scientific and prudent supervision around the failure of the national debt market and investor protection.At present,the supervision of my country's national debt market is chaotic,and the problem of market failure cannot be effectively corrected.A country has a more unified and specialized national debt law,
Jiaqi Xue 48
which can make its supervision more unified.Due to the scattered legal regulations on national debt in China,there are certain problems in work coordination.Therefore,the scattered laws should be integrated and regulated,and the supervision of the national debt market should be established on a specific and complete legal basis,so as to form a strong external constraint on the participants in the national debt market.[6]
3Conclusion
Since1950,the issuance scale of my country's government bonds in2019has reached45.3 trillion yuan.The most prominent manifestation is that the legislative process has not kept up with the development of the relevant national debt-that is,so far,there is no special legislation on national debt in our country,and it is only adjusted and regulated through scattered rules.As early as the State Council's1994Legislative Work Plan,the State Council Legal Affairs Office had included the National Debt Law in the Ministry of Finance's legislative plan,but for various reasons,the National Debt Law has not yet been promulgated.However,when our country deals with the actual problems related to national debt,there are many difficulties in applying the law,and at the same time,the existence of a large number of scattered regulations has led to the inconsistency between the law and the law,and the inconsistency between the subjects.[7]
According to Marxist philosophical theory,to solve a problem,we must grasp the main aspect of the main contradiction of the problem.Obviously,the main problem of many problems in the issuance of my country's national debt is the lack of the basic law of national debt.If the country can promulgate a"National Debt Law",even if it is just a simple summary and summary of the various provisions scattered in the existing laws and regulations,just because of its legal effect and legal status,it can make the existing existing laws and regulations.Most of the problems are solved.
About the Author
Jiaqi Xue,master,research direction:civil and commercial law.
References
[1]Li Z H.Research on the legal system of national debt[D].China University of Political Science and Law,2011.
[2]John M K.General Theory of Employment,Interest,and Money[M].Commercial Press,2005.
[3]Yang Z X.Economic Law[M].Peking University Press,2012.
[4]Zhong Z.Research on the Legal System of my country's National Debt Issuance[D].Lanzhou Business School,2012.
[5]Zhou J C.On the Legislation of my country's National Debt Law[J].Legal System and Society,2010(2).
[6]Yang F.On the Legal Regulation of my country's National Debt[D].Hebei University,2017.
[7]Xiang D.Research on the Legal System of Government Bonds in my country[D].Minzu University of China,2007.

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