ExplainerHow China is expanding and accelerating its ‘special bonds’ programme
Beijing is issuing more ultra-long-term government bonds as it strives to shore up the Chinese economy amid an intensifying US trade war
China’s Ministry of Finance kicked off its issuance of ultra-long-term special government bonds for 2025 on Thursday, as part of a plan to raise 1.3 trillion yuan (US$178 billion) over the course of the year.
This explainer breaks down what is new in this year’s special bond roll-out – from where the money is going, to how the government’s sales plan is changing.
What are ultra-long-term bonds, and how does China use them?
The ultra-long-term special government bonds China plans to sell this year are sovereign bonds with maturities of 20, 30 and 50 years. Essentially, they are financial tools the Chinese government uses to borrow money in order to fund public spending.
Historically, China has used ultra-long-term special treasury bonds sparingly, only issuing them during periods of economic difficulty or for targeted purposes, such as to fund disaster relief efforts.
In 2020, China deployed them to support its efforts to suppress the Covid-19 pandemic and support the economy through waves of lockdowns. Last year, they were used to fund economic stimulus policies and other major national projects.