CHINA'S target to issue shares worth five billion yuan (about HK$6.7 billion at official rates) this year might be hit by the sluggish sales of 1993 state treasury bonds, according to Chinese officials. Beijing has warned provinces and cities that unless they buy their quota of state treasury bonds, their stocks will not be allowed to list on the Shanghai and Shenzhen stock exchanges. It is understood that the warning was given at a recent meeting of provincial and city leaders. A vice-director of the secretariat of the policy-making China Securities Commission under the State Council, Mr Ma Zhongzhi, confirmed that such a policy had been made. Mr Ma said the measure aimed to ensure the smooth issuance of state treasury bonds. But he admitted that areas which failed to fulfil the assignment risked their listings being put on hold. China plans to issue 30 billion yuan worth of state treasury bonds this year. But when the issuance period expired at the end of April, only 15 per cent, or four billion yuan, of the target figure had been subscribed. Officials blamed the fund-raising activities by enterprises, including the issuance of shares. The China Securities Regulatory Commission, overseer of the country's securities markets, has said it will co-operate with the policy. It is understood that some areas have pressed ahead with share issues without the required approval by the regulatory body. Professor Gao Chengde of Beijing University, a member of the working group on securities law, agrees with the government's policy on stock listing. ''The development of our stock market should be subordinated to the country's overall economic objectives,'' he said. ''This is not a discrimination against stock markets,'' he said, adding that share issues should not be used as the main channel for raising investment funds. Professor Gao noted that Taiwan had achieved its economic success by adopting policies to encourage saving, instead of relying on its stock market to raise funds. On fears that the government was excessively interfering in the operation of the stock market, Professor Gao said that as the Chinese market had not reached maturity, ''it is unrealistic to exclude the government exercising some administrative measuresat this stage''. China has set an interest rate for the bonds of more than that offered on bank savings, which is on average 9.07 per cent, to increase their attraction. The bond issuance period will be extended for two months to provide time for the amount to be digested. The Ministry of Finance is also resorting to mandatory subscription for state treasury bonds. Pension and unemployment funds operated by state-owned enterprises will have to take a total of three billion yuan, and private businesses will each be asked to subscribe for 600 yuan's worth because their success was made possible by the government's favourable policies, officials said. The 50 million employees at state-owned or collectively owned enterprises would be mobilised to subscribe 100 yuan each, and existing holders would be persuaded to exchange expiring bonds for new issues.