First, the preference of state-owned enterprises for equity financing makes the development of corporate bond market lack of motivation. According to the theory of enterprise capital structure, in order to maximize the value and reduce the financing cost, the optimal financing order of enterprises should be: internal financing first, debt financing second, and equity financing last. However, as far as the financing structure of Chinese enterprises is concerned, enterprises prefer equity financing to debt financing. Because in general, shareholders exercise control over the company mainly by voting with their hands and feet. However, due to the excessive concentration of equity in most joint-stock companies in China and the limited circulation of state-owned shares, neither of these two methods can play a role. In addition, China's capital market and manager market are imperfect, which seriously weakens the constraints of state-owned shareholders on managers. In addition, equity financing is binding only when shareholders have a strong choice to managers, and debts must be repaid when they are due. In China, where there is no strong equity constraint, corporate managers will regard equity financing as a long-term fund without repayment of principal and interest, which is the fundamental reason why state-owned enterprises prefer equity financing, and also the key factor affecting the development of corporate bond market in China.
Secondly, the government intervenes too much in the corporate bond market. For a long time, China's corporate bond market has been strictly controlled by the government, and the issuance of bonds by enterprises has to be approved by relevant regulatory authorities. For example, before issuing bonds, it is necessary to obtain the issuance plan issued by the state planning department and obtain the approval of the central bank for issuing bonds. After issuing bonds, it is necessary to apply to the exchange for listing, and the listing transaction is supervised by the CSRC. In other words, the issuance rate of corporate bonds is approved by the National Development and Reform Commission and the People's Bank of China; The primary market is approved by the National Development and Reform Commission; The listing of the secondary market shall be examined and approved by the China Securities Regulatory Commission. Moreover, the government has strict restrictions on the region, ownership and industry of bond issuing enterprises. At the same time, the term, amount and use of the raised funds are also decided by the government. Excessive administrative intervention has affected the enthusiasm of enterprises to issue bonds and the development of corporate bond market.
Third, there are too few types of corporate bonds. Since the issuance of 1988, the types of corporate bonds are basically only key construction bonds, central corporate bonds and local corporate bonds. Due to the problem that some corporate bonds issued before 1993 could not be paid in time, most corporate bonds issued after 1994 were cancelled, leaving only central corporate bonds and local corporate bonds. 1998, launching convertible corporate bonds. At present, there are only three kinds of corporate bonds in China: central corporate bonds, local corporate bonds and convertible corporate bonds. Among these bonds, more than 90% of ordinary bonds, convertible bonds, unsecured bonds and floating rate bills appeared late, and their circulation was very small. In terms of interest rate varieties, most of them are fixed-rate bonds. Floating rate bills only appeared in 2000, and there were only four kinds of floating rate notes in 2002.