The issuance of 1 trillion ultra-long-term special government bonds with a maturity of up to 50 years began this week

CBN

2024-05-13 12:17Posted on the official account of Shanghai Yicai

Following the call of the Politburo meeting of the CPC Central Committee for the early issuance and use of ultra-long-term special treasury bonds, the Ministry of Finance has made arrangements to start issuing bonds next week.

On May 13, the website of the Ministry of Finance disclosed the "Notice on Announcing the Relevant Arrangements for the Issuance of General Treasury Bonds and Ultra-long-term Special Treasury Bonds in 2024", which clarified the issuance arrangements for ultra-long-term special treasury bonds in 2024, of which this year's ultra-long-term special treasury bonds will be issued on May 17 (Friday), with a term of 30 years, and the interest payment method is semi-annual interest.

Judging from the entire 1 trillion yuan ultra-long-term special treasury bond issuance arrangement, the treasury bond issuance period is 20 years, 30 years and 50 years, and the number of issuances is 7, 12 and 3 times respectively.

Wen Laicheng, a professor at the Central University of Finance and Economics, told Yicai that the Ministry of Finance's disclosure of the issuance plan of treasury bonds, especially ultra-long-term treasury bonds, on the one hand, facilitates the members of the treasury bond underwriting syndicate to arrange relevant bidding and other matters as soon as possible according to the plan, promotes the smooth issuance of ultra-long-term special treasury bonds, and completes fund raising, so as to promote investment, stimulate consumption, and stabilize the economy. On the other hand, it also responds to the market's concern about ultra-long-term special treasury bonds, especially the early prediction of the possible impact of the issuance of special treasury bonds on market interest rates, and arranging corresponding investments, which is conducive to stabilizing market expectations and boosting market confidence.

The above table is from the Ministry of Finance

China has decided to issue ultra-long-term special treasury bonds in the next few years, starting this year, to be used exclusively for the implementation of major national strategies and security capacity building in key areas. Among them, 1 trillion yuan of ultra-long-term special treasury bonds will be issued this year.

Zheng Shajie, director of the National Development and Reform Commission, explained the background of the introduction of ultra-long-term special treasury bonds, saying that this is an inevitable requirement to respond to profound changes in the international environment and firmly grasp the initiative of development, and it is also a practical need to coordinate development and security and solidly promote high-quality development. The issuance of ultra-long-term special treasury bonds in the next few years is a major strategic decision made by the CPC Central Committee and the State Council in view of the overall strategic situation of building a strong country and rejuvenating the nation, which will benefit both the present and the long-term. In other words, it can not only stimulate current investment and consumption, but also lay the foundation for long-term high-quality development.

According to this year's central and local budget reports, 1 trillion yuan of ultra-long-term special treasury bonds will be included in the budget of the central government fund and will not be included in the deficit. In terms of expenditure allocation, the central government will temporarily allocate 500 billion yuan for expenditure at the same level and 500 billion yuan for local transfer payments, and will be adjusted in the future according to the specific distribution situation.

In this deployment, it is clarified that the maturity of ultra-long-term special treasury bonds is more than 20 years, most of which are concentrated in 30 years, and the maximum is 50 years. Experts interviewed by CBN previously believe that the long maturity of special treasury bonds is conducive to alleviating the pressure of short- and medium-term debt repayment, optimizing the debt structure, enhancing the ability to guarantee long-term projects, and reducing debt risks.

In this year's ultra-long-term special treasury bond investment, the National Development and Reform Commission previously introduced that it will focus on accelerating the realization of high-level scientific and technological self-reliance and self-reliance, promoting the integrated development of urban and rural areas, promoting regional coordinated development, improving the security and security of food and energy resources, promoting high-quality population development, and comprehensively promoting the construction of a beautiful China.

Luo Zhiheng, chief economist of Guangdong Kai Securities, believes that the issuance of special treasury bonds will help expand aggregate demand, optimize the supply structure, improve the efficiency of economic operation, and increase the potential growth rate of China's economy. At the same time, the issuance of special treasury bonds has optimized the debt structure and reduced debt risks. Compared with local governments, the central government's issuance of bonds has a lower cost and longer cycle, and ultra-long-term special treasury bonds have formed high-quality assets, and more importantly, they have avoided the risks caused by local leverage, making room for local finances.

(This article is from Yicai)

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