China's Ministry of Railways (MOR) auctioned 20 billion yuan ($3.15 billion) worth of bonds on October 12 to finance the construction of the country's railway network.

The bonds were split into two categories: 10 billion yuan ($1.57 billion) worth of seven-year paper and 10 billion yuan worth of 20-year paper, according to the ministry's announcement.

The State Council recently halved the income tax to 12.5 percent on earnings on the bonds issued by the MOR between 2011 and 2013.

At the end of June, the MOR's outstanding debt stood at 2.09 trillion yuan ($328.6 billion).