So Mr Liu decided that the treasury could absorb about 100 billion yuan through a domestic bond issue starting on April 1 - effectively three times the size of all bond issues last year.

Mr Liu might be confident that the bond issue will go down well with the Chinese public, despite the poor reception accorded to the past few launches.

Experience, however, suggests that any such confidence is misplaced.

Under normal circumstances, Mr Liu would have found a warm welcome for his bond issue. Indeed, anyone with some knowledge of economics would conclude that putting existing idle financial assets to work rather than printing money to meet the budget deficit would be a major step towards bringing inflation under control.

Here is a healthy dose of market economic policy from the People's Daily, the Government's mouthpiece: ''From this year on, the central Government will not increase inflationary pressure by borrowing from the central bank to finance its deficit.

''The treasury bond issue will convert idle funds that will otherwise be spent on consumption into funds for state projects.'' On the surface, the 13 per cent interest rate on the two-year bonds and the 13.96 per cent on the three-year bonds are more attractive than the returns on bank deposits of a similar term. On top of that, the three-year bonds are to be linked to nationwide inflation.

The trouble is, the bond structure is not attractive as it seems.

The anticipated buyers of these bonds are expected to be urban residents, who are experiencing inflation running at about 19.6 per cent in the major cities. (Some suggest it is massively above that figure). The link to inflation, however, is based on the national average, which is significantly lower than what urban residents experience.

Put simply, this means that even the higher bond coupon rates will not be enough to attract hordes of buyers.

So, despite his assurance that state employees will not be forced to buy bonds which no one wants, Mr Liu will inevitably be twisting arms once more.