Government bonds

A government bonds exchange opens in Chongqing in 1988.

In August 1980, facing a record budget deficit of nearly 30 billion yuan, treasury minister Wang Bingqian announced the first ever government bond issue.

At the time there was no real market in government bonds, and buying them was seen as a patriotic duty rather than an investment. Work units were allocated bonds to sell to their members. High ranking officials were expected to buy significant amounts and even the rank and file felt obliged to buy one or two. Between 1981 and 1987 about 6 billion yuan of government bonds were issued annually but still only covered a fraction of the budget deficit.

In April 1988, exchanges were opened to trade in government bonds and it became possible to make money out of them. Jiang Qinghua whose salary had risen to 100 yuan after a promotion, took the opportunity to invest in bonds and turned a handsome profit.

By 1994, the value of issued bonds had passed the 100 billion yuan mark. In 1996 another milestone was reached when a register of bond-holders replaced the old certificates and took bonds into the paperless era.