China's latest weapon to battle its deficits and spur development will be mammoth bond issues.

Government entities will issue 46.5 billion yuan (US$13 billion) worth of bonds this year, officials disclosed Tuesday.They will include 9 billion yuan in treasury bonds, 3.5 billion yuan for key projects and 8 billion yuan each for capital construction and major government works.

China issued 30 series of bonds overseas last year valued at US$3.4 billion. Floating-interest bonds worth US$200 million were sold in London for China's petrochemical industry.

On April 1, the People's Bank of China, the central bank, started selling to the public 1 billion yuan worth of bonds in denominations of 100, 500 and 1,000 yuan.

Bonds will be valid for one to three years. Interest will be 9 percent in the first year and increase 1 percent in each of the following two years.

The central bank and the state planning commission jointly issued a circular outlining procedures for selling capital construction bonds this year.

Specialized banks have been given quotas for bond purchases. Issues must be approved by the central bank.

Government-owned businesses - especially construction companies working on important projects and factories - will be authorized to issue medium- and long-term bonds to the public.

On April 20, China allowed its first non-financial entity to issue bonds to individuals.

The China High-Tech Venture Co. in Beijing offered 30 million yuan in three-year bonds underwritten by 12 Chinese banks. Annual interest of 10 percent will be paid on the 100- and 500-yuan denomination bonds.

Funds from that sale will be used to construct energy plants, transportation systems and technical improvements in industry.

The financially ailing Wuhan iron and steel complex, among the nation's largest metallurgical facilities, issued bonds last year to raise money to continue production.

Baoshan iron and steel near Shanghai sold 350 million yuan in 10-year bonds to raise capital for its second phase of construction.

Since 1981, the government has issued treasury bonds to help ease budget deficits and provide backing for transport, energy, communications and raw material projects.

China sold 9 billion yuan in bonds annually in the last three years after 6 billion yuan a year from 1981 through 1984.

This year, the government plans to sell 9 billion yuan worth of treasury bonds - 3.5 billion to the public and 5.5 billion to businesses.

Those purchased by individuals will offer 10 percent annual interest, while those bought by collectives will carry a 6 percent rate.

In the second year after an issue, the bonds can be traded, circulate in

financial markets and be discounted by banks.

Seven Chinese cities last week became the first of 54 intended to participate in buying and selling treasury bonds issued in 1985-86.

Under People's Bank supervision, the bonds were negotiable in Shanghai, Harbin, Chongqing, Wuhan, Shenyang and Guangzhou (Canton). Most were transacted in area stock exchanges at higher prices than the face value when first sold.