China will resume trading of Treasury bond futures next week, state media said Friday, 18 years after a scandal prompted regulators to yank the financial product.

The market watchdog, the China Securities Regulatory Commission, approved the trading of futures contracts for five-year Treasury bonds from Sept. 6, the official Xinhua news agency reported.

They will be dealt on the China Financial Futures Exchange in Shanghai, the country's financial capital, it said.

Previously, Treasury bond futures were traded on the Shanghai Stock Exchange.

The exchange suspended them in 1995 after a brokerage placed a huge sell order in the last few minutes of trading, causing the price to plummet. The order was later found to be in violation of the rules.

The re-introduction of bond futures has been rumored for months, following media reports.

Analysts say bond futures will help financial institutions hedge risk.