(Yicai) Dec. 11 -- China will issue CNY750 billion (USD106.2 billion) of special treasury bonds to repay the principal of the same amount of such notes, continuing the practice of renewing the special treasury bonds issued in 2007 upon maturity.

The Ministry of Finance will sell CNY400 billion of 10-year special treasury bonds and CNY350 billion of 15-year special treasury bonds on December 12 to repay such bonds due the same day, it announced yesterday.

Since the first batch of the special treasury bonds matured in 2017, the ministry has been issuing new bonds to repay the maturing old ones.

The ministry will continue the practice of previous years and adopt a rolling issuance method to issue special treasury bonds this year to renew notes upon maturity to related banks, noted an official in charge at the ministry. The raised funds will be used to repay the principal of the same amount of the bonds due in the month of issuance, the person added.

The special treasury bonds issued to renew notes upon maturity are the rolling issuance of the original special treasury bonds of the same amount and will not increase the fiscal deficit, the person pointed out.

However, the maturity of the latest bonds issued has been extended to 10 years and 15 years compared with three years for the ones previously sold, Yicai found.

The ministry issued CNY1.55 trillion (USD219.5 billion) of special treasury bonds in 2007, mainly to inject capital into the newly established China Investment Corporation, the country's sovereign wealth fund, which then used the funds to buy foreign exchange reserves from China's central bank to promote diversified operation of foreign exchange assets and hedge against the excessive liquidity and inflationary pressure in the market at that time.

Editors: Tang Shihua, Martin Kadiev