China issues year’s first batch of ultra-long special treasury bonds

Customers check out new-energy vehicles at a large shopping mall in Jinhua, East China's Zhejiang Province on February 23, 2025. According to data from the National Development and Reform Commission, China issued 150 billion yuan ($20.7billion) in ultra-long-term special government bonds in 2024 to support trade-in programs for consumer goods, boosting sales of more than 1.3 trillion yuan. Photo: VCG

 
This year's first batch of 1.3 trillion yuan ($178.40 billion) of ultra-long special treasury bonds was issued on Thursday, with 50 billion yuan featuring a coupon rate of 1.98 percent allocated to 20-year bonds as well as 71 billion yuan with a coupon rate of 1.88 percent and a 30-year term. 
 
This year's Government Work Report stated that a total of 1.3 trillion yuan of ultra-long special treasury bonds will be issued, 300 billion yuan more than last year, and 500 billion yuan of special treasury bonds will be issued to support large state-owned commercial banks in replenishing capital. 

Specifically, 800 billion yuan will be dedicated to projects that are aligned with major national strategies, building up security capacity in key areas, while 500 billion yuan will be used to support the expansion of large-scale renewal of equipment and trade-ins of consumer goods, CCTV reported on Thursday. 

Ultra-long special treasury bonds primarily serve to alleviate local fiscal debt burdens, enabling localities to mobilize public resources for economic growth and enhance their fiscal capacity. Strengthened local finances not only boost debt repayment credibility but also foster collaboration with other economic entities, creating synergies that drive regional development, said Xi Junyang, a professor at the Shanghai University of Finance and Economics. 

The bonds can also be applied to other important sectors that propel economic development, in a bid to address insufficient domestic demand. By channeling funds into infrastructure and public welfare projects, these bonds can boost domestic demand and stimulate growth, Xi told the Global Times on Thursday. 

He added that the bonds can further enhance stimulus measures, such as consumption vouchers and trade-in subsidies, actively boosting the economic expansion. 

Song Ding, a research fellow at the China Development Institute, told the Global Times on Thursday that the issuance of the ultra-long special treasury bonds is an actual implementation of a more proactive fiscal policy.  

Also on Thursday, China issued 165 billion yuan of special treasury bonds intended to support large state-owned commercial banks in replenishing capital, with a term of five years and a coupon rate of 1.45 percent, the Xinhua News Agency reported. 
 
Compared with 2024, the issuance of this year's bonds started nearly a month earlier.  The full issuance is expected to be finished one month ahead of last year's schedule, Jiemian News reported, citing a report from Changjiang Securities.

A total of 300 billion yuan in ultra-long special treasury bonds has been arranged to support consumer goods trade-ins, an increase of 150 billion yuan over last year, Chinese Finance Minister Lan Fo'an said at this year's China Development Forum in March. 

Lan said that the doubled funding amount can help reduce consumer purchasing costs while integrating livelihood improvement with consumption promotion through pension increases and medical subsidies, continuously enhancing household spending capacity and willingness. 
 
The large-scale equipment upgrade and consumer goods trade-in programs to boost domestic demand have achieved noticeable results, Song said. 

Since the start of the intensified implementation of the home appliance trade-in policy in August 2024, consumers have purchased 100.35 million appliances as of April 10, according to data released by the Ministry of Commerce. 

Xi anticipates policy moves such as further lowering the reserve requirement ratio and intensifying monetary easing measures, including potential interest rate cuts. 

Such policy coordination will synergize more effectively with the fiscal policy of issuing ultra-long special treasury bonds, generating more pronounced effects on economic development when these measures are implemented in concert, Xi said.