Abstract: The negative credit events in China’s bond market have been increasing, which becomes a new normal in China’s bond market. Facing such a new normal, the government has adopted new ways to deal with it, including marketization and legalization, instead of the traditional ways to compensate all the bondholders’ losses in such bond default events. This new disposal method indicates on one hand that the bond market of China is gradually maturing, but on the other hand, it also implies that the investors will face greater investment risks. In order to effectively control the systematic financial risk, activate China’s bond market, further promote the orderly, healthy and benign development of the bond market, and reduce the damage caused by defaults to the investors, it is imperative for Chinese government to establish a market-oriented and legalized supervision system for the bond market.

Key words: bond market; supervision system; marketization; legalization