On May 13, the Ministry of Finance announced the relevant arrangements for the issuance of general treasury bonds and ultra-long-term special treasury bonds in 2024. On May 17, the first special 30-year government bonds were issued.
Ultra-long-term special government bonds will be issued from May 17
According to the issuance arrangement, there are three types of ultra-long-term special treasury bonds, namely 20-year, 30-year and 50-year bonds.
- On May 17, the first issue was a special 30-year treasury bond.
- On May 24, the first 20-year special treasury bond was issued by tender.
- On June 14, the first 50-year special treasury bond was issued by tender.
A total of 22 issuances this year took place between May and November, mainly in the third quarter.
Luo Zhiheng, President of Yuekai Securities Research Institute: The further announcement of this plan is conducive to raising funds as soon as possible for major strategic projects and security capacity building in key areas. The rhythm of issuance is relatively balanced, and there are basically monthly issuances, which is conducive to better coordination between finance and finance.
What are ultra-long-term special government bonds?
So, what exactly are ultra-long-term special government bonds?
The so-called ultra-long-term special treasury bonds contain three key words: ultra-long-term, special, and treasury bonds.
- Ultra-long-term, refers to the term. In the bond market, interest rate bonds with a maturity of more than 10 years are generally considered to be "ultra-long-term bonds". Compared with ordinary government bonds, ultra-long-term bonds can alleviate the pressure of debt repayment in the short and medium term, exchanging time for space.
- In particular, it is talking about the use of funds. It is a treasury bond issued for a specific target with a clear purpose, and the funds need to be earmarked. According to this year's government work report, the ultra-long-term special treasury bonds mentioned this time are "to systematically solve the problem of funds for the construction of some major projects in the process of building a strong country and national rejuvenation", "specially used for the implementation of major national strategies and security capacity building in key areas", and "1 trillion yuan will be issued first this year", with the goal of promoting a sustained economic recovery.
- Treasury bonds, a kind of government bonds issued by the state in order to raise financial funds, have the highest creditworthiness and are recognized as the safest investment tools, so they are also very popular with the people.
Luo Zhiheng, President of the Guangdong Kai Securities Research Institute: The arrangement of ultra-long-term special treasury bonds is actually considered by the Party Central Committee in view of the overall situation of economic and social development, and has several effects and effects:
- Investing in major projects is objectively conducive to expanding aggregate demand.
- When various major projects are formed, it is conducive to improving the efficiency of economic operation, and in fact, it is also optimizing the supply structure, which can form a large number of high-quality assets.
Specifically, in terms of support areas, the ultra-long-term special treasury bonds will focus on key tasks such as accelerating the realization of high-level scientific and technological self-reliance and self-reliance, promoting the integrated development of urban and rural areas, promoting coordinated regional development, improving the security of food and energy resources, promoting high-quality population development, and comprehensively promoting the construction of a beautiful China.
Ultra-long-term special treasury bonds will help optimize the mainland's debt structure
Experts said that the issuance of ultra-long-term special treasury bonds will not only benefit the present but also benefit the long-term, and will help stimulate investment and consumption, and will also help optimize the mainland's debt structure.
Internationally, what is the proportion of ultra-long-term treasury bonds in a country's bonds?
Data as of the end of February last year show that in terms of issuance scale, the absolute size of the balance of ultra-long-term Treasury bonds in the United States is the highest; In terms of proportion, Japan has the largest relative proportion of ultra-long-term government bonds. Among the major economies that issue ultra-long-term treasury bonds, the mainland is at a relatively low level in terms of size and proportion.
Luo Zhiheng, President of Guangdong Kai Securities Research Institute: As of the end of April 2024, the proportion of ultra-long-term treasury bonds in the mainland is about 16.9%, which is lower than the proportion of the United States, Japan and other developed economies in Europe, so it is necessary to further increase.
According to the data, as of April 30, 2024, the ultra-long-term treasury bonds in the mainland's stock of treasury bonds are dominated by 30-year and 50-year bonds, accounting for 11.6% and 3.6% respectively. In the future, if ultra-long-term special treasury bonds are issued for several consecutive years, the situation of a relatively low proportion of ultra-long-term treasury bonds will be effectively improved.
Luo Zhiheng, President of Guangdong Securities Research Institute: The issuance of ultra-long-term special treasury bonds has optimized the structure of government debt, actually increased the proportion of government bonds, reduced the proportion of local bonds, and reduced the risk of government debt.
The mainland has issued ultra-long-term special treasury bonds on many occasions
This is not the first time that ultra-long-term special government bonds have been issued this year.
As early as 1998, the mainland issued 270 billion yuan of special treasury bonds to the four major state-owned banks, mainly to supplement the capital of wholly state-owned commercial banks.
- In 2007, another 1.55 trillion yuan of special treasury bonds were issued to be used as capital for the establishment of the State Foreign Exchange Investment Corporation.
- The most recent was in 2020, when 1,000 billion yuan of special anti-epidemic treasury bonds were issued.
Judging from experience, the issuance of special treasury bonds has had a positive impact on the stable and positive development of the economy and society.
(Source: CCTV News)