The sale encouraged local authorities, government departments and enterprises to increase support funds. Bank loans and investment from other areas of society were also forthcoming.

The T-bond investment boosted nearly 10,000 projects that were critical in economic restructuring and stimulating domestic demands.

A total of 3.2 trillion yuan (US$385.5 billion) was earmarked from local governments, the private sector and foreign investors.

"This investment played a vital role in boosting economic growth, improving the economic structure, increasing employment, improving people's living standards and enhancing the quality of bank assets," said Zeng, minister of the State Development Planning Commission.

China has used a proactive fiscal policy as its main tool in macroeconomic management since 1998 to avoid possible negative impacts from 1997 Asian financial crisis.

The government decided treasury bonds should play an important role in promoting economic and social development.

Long-term treasury bonds worth 150 billion yuan (US$18 billion) were issued this year, bringing the total bond issue from 1998 through 2002 to 660 billion yuan (US$80 billion).

"Maintaining the necessary level of investment from treasury bonds is helpful in stimulating a relatively rapid growth of fixed-asset investment," Zeng said at the opening ceremony of Picture Exhibition on T-bond Projects in Beijing yesterday.

The funds have been used mainly for bond-financed projects under construction, development projects in the western regions, technological transformation of key enterprises, water diversion from the south to the north and water resource conservation in Beijing and Tianjin.

Those projects also include the reinforcement of 30,000 kilometers of banks and dykes on major rivers and lakes, development of new towns for more than 2 million people displaced from their homes along the banks of the Yangtze River and increased flood diversion and detention areas by about 3,000 square kilometers.

In addition, construction of five vertical and seven horizontal national trunk highways and eight other highways in the western region was accelerated.

A total of 25,500 kilometers of new highways were opened to traffic, including 8,000 kilometers of expressway. This brings the total length of expressway in China to 19,000 kilometers, ranking the country second in the world.

Zeng said all local authorities and government departments proved themselves highly responsible to the country and the people by strengthening the management of funds from the sale of treasury bonds and the quality of construction projects.

(China Daily December 3, 2002)