1 trillion ultra-long-term special government bonds are coming! What are the implications? What areas will be supported? Expert interpretation

New Yellow River

2024-05-13 19:15Posted on the official account of Shandong New Yellow River News client

Today (13th), the Ministry of Finance announced the relevant arrangements for the issuance of general treasury bonds and ultra-long-term special treasury bonds in 2024. According to the arrangement, the maturity of ultra-long-term special treasury bonds includes 20 years, 30 years and 50 years, and interest is paid on a semi-annual basis. Among them, the 30-year maturity will be issued on May 17 first.

This year's government work report proposes that starting from this year, it is planned to issue ultra-long-term special treasury bonds for several consecutive years, which will be used for the implementation of major national strategies and security capacity building in key areas, and 1 trillion yuan will be issued this year. According to the notice, the maturity of ultra-long-term special treasury bonds to be issued this year is 20 years, 30 years, and 50 years respectively, and the first issuance time is May 17, and the issuance will be completed in mid-November.

According to the Securities Times, on March 6, the second session of the 14th National People's Congress held a press conference on the economic theme, Zheng Shajie, director of the National Development and Reform Commission, said that the issuance and use of ultra-long-term special treasury bonds is a major policy measure, and expanding effective investment is an important policy grasp. Starting this year, we will continue to issue ultra-long-term special treasury bonds in the next few years to be earmarked for the implementation of major national strategies and security capacity building in key areas, which will benefit both the present and the long-term.

Liu Sushe, deputy director of the National Development and Reform Commission, said at a press conference of the State Council Information Office in mid-April that the National Development and Reform Commission and relevant parties have studied and drafted an action plan to support the country's major strategies and security capacity building in key areas, and will begin to organize and implement it after approval and consent.

Liu Sushe pointed out that the action plan will focus on supporting a number of important and difficult things that are related to modernization, urgently needed for development, have been wanted to do for many years but have not been able to do, and need to be promoted at the central level, adhere to high-quality development and high-level security and benign interaction, and consolidate the foundation of national security and long-term development; Adhere to the overall planning of hard investment and soft construction, and use reform methods and innovative ideas to break down deep-seated obstacles; Adhere to the step-by-step implementation and orderly progress, and issue 1 trillion yuan of ultra-long-term special treasury bonds in 2024.

What are ultra-long-term special government bonds?

Ultra-long-term special treasury bonds can be broken down into three key words: treasury bonds, special and ultra-long-term bonds.

National debt: A type of government bond issued by the central government to raise financial funds. Since the issuer of treasury bonds is the state, it has the highest creditworthiness and is recognized as the safest investment vehicle.

Special: The issuance of special treasury bonds refers to the treasury bonds issued in stages for a specific purpose in a specific period, and are not included in the deficit and do not increase the deficit rate.

Ultra-long-term: In terms of issuance period, ultra-long-term generally means that the issuance period is not less than 10 years, and the maturity of ultra-long-term special treasury bonds to be issued this year is divided into three varieties: 20 years, 30 years and 50 years.

In addition, according to the relevant deployment, it is planned to issue ultra-long-term special treasury bonds for several consecutive years this year, which also releases the tone of the implementation of a proactive fiscal policy in the next few years, which will help stabilize expectations and boost confidence.

What is the impact of the issuance of ultra-long-term special government bonds?

Judging from historical experience, the issuance of special treasury bonds has had a positive impact on the stable and positive development of the economy and society, and the mainland has issued special treasury bonds in 1998, 2007 and 2020.

Based on the views of experts, the issuance of ultra-long-term special treasury bonds is beneficial to both the present and the long-term, which will help stimulate investment and consumption, promote the transformation of economic momentum, build a modern industrial system, and develop new quality productivity.

At the same time, it also helps to optimize the debt structure. 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, which have also avoided the risks caused by excessive local leverage, making room for local finances.

When will ultra-long-term Treasury bonds be activated? What areas will be supported?

According to the issuance arrangement, 7 20-year ultra-long-term special treasury bonds will be issued this year, of which 2 will be issued for the first time and 5 will be renewed, which will be issued as early as May 24; 12 30-year ultra-long-term special treasury bonds will be issued, of which 3 will be issued for the first time and 9 will be renewed, and the earliest will be issued on May 17; It is planned to issue 3 50-year ultra-long-term special treasury bonds, of which 1 will be issued for the first time and 2 for the renewal, which will be issued as early as June 14.

In terms of the preparatory work for ultra-long-term special treasury bonds, Liu Sushe, deputy director of the National Development and Reform Commission, said at the press conference of the State Council Information Office that in accordance with the deployment of the Party Central Committee and the State Council, the National Development and Reform Commission and relevant parties have studied and drafted an action plan to support the country's major strategies and security capacity building in key areas, and will begin to organize and implement it after approval and consent.

In terms of support areas, we will focus on key tasks such as accelerating the realization of high-level scientific and technological self-reliance and self-reliance, promoting urban-rural integrated development, promoting coordinated regional development, improving the security capacity of food and energy resources, promoting high-quality population development, and comprehensively promoting the construction of a beautiful China.

How to manage and make good use of the funds of ultra-long-term special treasury bonds?

In terms of the organization and implementation of the action plan, Liu Sushe introduced that it will adhere to the principle of "the project follows the plan, the funds follow the project, and the supervision follows the funds", and the National Development and Reform Commission will take the lead in conjunction with relevant departments to effectively strengthen overall coordination, do a good job in financial guarantees, optimize investment methods, and increase supervision, especially to approve and build a number of projects with more mature and qualified preliminary work as soon as possible. Form a synergy with the construction of major projects to ensure that the tasks specified in the action plan are implemented with high quality and effective.

Wang Jianfan, director of the Budget Department of the Ministry of Finance, said that he would study the establishment of a regulatory mechanism in light of the actual situation of ultra-long-term special treasury bond funds, strengthen the supervision of the whole process of fund allocation, issuance and use, and ensure standardized, safe and efficient use.

How will it affect market liquidity?

Judging from the signals released by all relevant parties, the issuance and use of special bonds will be accelerated at the same time as the ultra-long-term special treasury bonds are launched in a timely manner.

Experts believe that the increase in the supply of government bonds will lead to a corresponding increase in medium and long-term liquidity demand, and the implementation of RRR cuts at this stage can create a suitable liquidity environment. "In the second quarter, the issuance of government bonds and policy bank bonds is likely to accelerate, and in the third quarter, the issuance may usher in a peak, and the central bank may consider reducing the reserve requirement ratio to provide liquidity, and coordinate with fiscal policy to iron out capital fluctuations." Zhang Jun, chief economist and dean of the research institute of China Galaxy (601881), said.

In addition, the market expects that the PBOC will also flexibly grasp the operation of policy tools such as reverse repo in the open market, accurately hedge the short-term impact of fiscal bond issuance, and maintain the stable operation of market interest rates. In order to enrich the liquidity management toolbox, the central bank may include the purchase and sale of treasury bonds in the policy tool reserve in the future.

According to the National Business Daily, Xinhua News Agency

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