chapter  2
Empirical analysis of China’s national debts since reform of the economic system in 1978
ByGao Peiyong
Pages 11

National debts issued in 1981 were generally used as an expedient to satisfy temporary demand. China had no intention to issue treasury bonds, and its original intention was to "centralize some of the money that had been decentralized". Both the principal and interest of national debts are considered a special debt spending item under national fiscal expenditure and need to be repaid eventually. The national debts which matured in 1991 had been repaid pursuant to the plan made in 1988, where the matured bonds held by organizations were exchanged for convertible bonds in a more normative manner of issuing roll-over debts. The effect of the expanding scale of fiscal expenditure on the expanding scale of national debts in the same period could be traced back to the fact that the expanding scale of fiscal expenditure consisted of the expanding debt expenditure and price subsidy expenditure.