China issues treasury bonds of 140 billion yuan in 2003

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Last updated at: (Beijing Time) Thursday, December 04, 2003

China issues treasury bonds of 140 billion yuan in 2003

In 2003, China issued 140 billion yuan (about 17 billion US dollars) of long-term treasury bonds for domestic construction, on top of the T-bonds issued over the previous five years.

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In 2003, China issued 140 billion yuan (about 17 billion US dollars) of long-term treasury bonds for domestic construction, on top of the T-bonds issued over the previous five years.

As a part of active financial policies advocated by the Chinese government for years, China has altogether issued a total of 800 billion yuan T-bonds to expand domestic demand and increase infrastructure investment.

Figures show that one yuan of T-bond investment can lead to 10 yuan of social investment, and during the first nine months this year, China's fixed asset investment grew 30.5 percent year-on-year.

Experts estimated that T-bond investment annually contributed to 1.5 to 2 percentage points of national economic growth, and directly created almost 10 million job opportunities.

T-bond investment also increased urban and rural people's income. China has put a large amount of such funds on rural construction, including all sorts of water conservancy projects, improvement of rural grid and new road construction.

During the first nine months this year, China's rural people's per capita cash income grew 3.8 percent to 1,802 yuan, while urban residents' per capita income grew 9 percent to 6,347 yuan.

Next year China is to reduce the amount of T-bonds to 110 billion yuan and shift the focus of government investment to economic restructuring and promoting balanced growth, according to Minister in charge of the State Development and Reform Commission (SDRC) Ma Kai.

The current economic situation was turning for the better, with corporate profits growing and non-government investment on the rise. Therefore, Ma said, the size of T-bond issuance can be scaled down.

The T-bond money for the next year would be used mainly on improving living and production conditions in rural areas and building facilities of public health, basic education, grass roots administration and law enforcement authorities, according to official sources.

The ongoing construction of T-bond-funded projects still require some 1 trillion yuan of investment, and as the country invested heavily in the development of an emergency public health network and nine-year compulsory education for all children in western areas, a certain amount of government spending was needed, experts said.

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