Study on the Predictive Power of China's Treasury Bond Term Spread to Economic Growth

DOI: https://doi.org/10.62517/jse.202511407

Author(s)

Li Jiashen

Affiliation(s)

Department of Economics,North China University of Technology, Tangshan , Hebei ,China

Abstract

This paper examines China's government bond term spreads' predictive power for economic growth using 2015-2024 quarterly data via basic and extended (with PMI) linear models. Basic model shows weak, insignificant positive correlation. With PMI, term spread coefficient hits 34.56 (highly significant), model explanatory power rises from 4.8% to 49.5%, indicating real economy influences predictive power. Recommendations: include spreads in macro-prudential monitoring, boost PMI via fiscal/industrial policies, and build a multi-indicator policy evaluation system.

Keywords

Treasury Bonds; Term Spread; Economic Growth; GDP; Forecast

References

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