The Ministry of Finance of China announced this Monday that it will issue special 20, 30 and 50-year State bonds for the first time, at a time when local authorities are trying to alleviate the slowdown of the world’s second largest economy.
The first batches of 20, 30 and 50-year bonds will enter the market on May 24, May 17 and June 14, respectively, the institution reported in a statement.
According to sources cited by Bloomberg, the Asian giant will issue bonuses 20-year bonds for a value of 300,000 million yuan (US$ 41,465 million, 38,500 million euros), 30-year bonds for 600,000 million yuan (US$ 82,930 million, 77,000 million euros) and 50-year bonds, for value of 100,000 million yuan (US$ 13,821 million, 12,833 million euros).
During China’s annual legislative session last March, the government announced in its work report the issuance of “ultra-long-term” bonds as part of a plan to “address the financing needs of important projects in the nation-building process.” ”.
The bonds, the Executive noted, would focus on “supporting national strategic implementation and the development of security capabilities in key areas.”
The local press then noted that the funds raised through the issuance of these bonds would be specifically used in “projects related to technological innovation, integrated urban-rural development, regional integration, food and energy security, and high-quality development.” of the population.”
The analyst of the financial newspaper Economic Daily Xiong Li then asserted that the decision “sends a clear signal of the active fiscal policy” of the Government, which could “stimulate expectations, increase total demand and improve the supply structure, thus boosting the Economic recovery”.
In 2020, China announced that it would issue special State bonds worth 100,000 million yuan (US$ 13,821 million, 12,833 million euros) to alleviate the impact of the coronavirus on the economy, although on that occasion they had a maximum term of seven years.
Low national and international demand, risks of deflation and insufficient stimuli, along with a real estate crisis that has not bottomed out and a lack of confidence within the private sector are some of the main causes that analysts put forward to explain the situation in the world’s second largest economy.
Source: Gestion
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