T-bond cut-back continues

China will continue to cut the amount of long-term treasury bonds it issues this year, state media reported. Sources said Beijing will issue US$7.4 billion worth of special bonds in 2006, US$2.5 billion less than last year. It is hoped the cut will cool investment in construction and in overheated infrastructure industries, such as steel and cement. Treasury bond issuance has been pegged back every year since 2003. The government is expected to increase spending in sectors such as the development of rural and agriculture areas to balance the economy.