This newspaper reported that the 2024 ultra-long-term special treasury bond issuance arrangement was announced.
On May 13, the Treasury Department of the Ministry of Finance convened a mobilization meeting for the members of the treasury bond underwriting group to send a signal to the outside world that the issuance of ultra-long-term special treasury bonds will soon be launched. On the same day, the General Office of the Ministry of Finance issued a notice on the "Relevant Arrangements for the Issuance of General Treasury Bonds and Ultra-long-term Special Treasury Bonds in 2024" (hereinafter referred to as the "Issuance Arrangements"), clarifying the follow-up treasury bond issuance plan.
So, what is the special location of ultra-long-term special government bonds? What is the impact of ultra-long-term special government bonds? Can ordinary people buy it?
Where is the ultra-long-term special treasury bond in particular?
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.
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. However, this is not the first time that ultra-long-term special treasury bonds have been issued, as the mainland has issued special treasury bonds three times in 1998, 2007 and 2020. 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, 1.55 trillion yuan of special treasury bonds were issued to be used as capital for the establishment of a national foreign exchange investment company. The most recent was in 2020, when 1,000 billion yuan of special anti-epidemic treasury bonds were issued.
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.
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.
So, can individual investors subscribe to special government bonds?
Lian Ping, president and chief economist of Guangkai Chief Industry Research Institute, said that whether individual investors can participate in the subscription depends on the specific issuance object. Judging from past experience, the 1998 special treasury bonds were issued to institutions, while the 2020 anti-epidemic special treasury bonds explicitly encouraged individuals and micro, small and medium-sized enterprises investors to subscribe. In order to promote the smooth issuance of this round of ultra-long-term special treasury bonds, it is suggested that the issuance of ultra-long-term special treasury bonds to institutions and individuals should be considered at the same time. Of course, the target of the issuance of specific bond batches can be appropriately focused on and distinguished.
What is the impact
According to the 2024 government work report, in order to systematically solve the funding problem of some major projects in the process of building a strong country and national rejuvenation, it is planned to issue ultra-long-term special treasury bonds for several consecutive years starting from this year. In this way, the ultra-long-term special treasury bonds are mainly used for the implementation of major national strategies and security capacity building in key areas, and the issuance of special treasury bonds is to promote the transformation of economic momentum and build a modern industrial system on the one hand. On the other hand, the foundation for the sustained economic recovery is not stable, and the effective demand is insufficient, so the demand side needs to make active efforts.
To put it simply, the ultra-long-term special treasury bonds are mainly used for economic construction and to promote the sustained recovery and transformation of the mainland's economy.
So, what is the impact of ultra-long-term special government bonds on the stock market?
First, stimulate the economy and boost market confidence. The issuance of ultra-long-term special treasury bonds has released a positive fiscal policy signal, and the support and development of the economy have become clearer, especially the optimization of the debt structure of the central and local governments is conducive to stimulating the economy and boosting confidence under the support of local economic construction. While boosting the economy will bring basic support to the stock market, it will also bring emotional stimulation;
Secondly, under the great development of key support areas, the relevant fields of the stock market have ushered in major opportunities. According to the NDRC, the areas of support for ultra-long-term special treasury bonds include scientific and technological innovation, urban-rural integrated development, regional coordinated development, food and energy resource security, and high-quality population development.
So, are there liquidity concerns?
As ultra-long-term special government bonds will attract a large amount of capital to participate in the subscription, the market may have concerns about tightening liquidity. In fact, the subscription of special treasury bonds will indeed drain some of the liquidity in the stock market, but if we look at it in the long run, these funds will also flow back to the market in various forms, bringing stimulus to related industries and listed companies, and on the other hand, in order to prevent the issuance of special treasury bonds from leading to a tightening of market liquidity, monetary policy will also exert appropriate efforts to ensure the stability of market liquidity. Therefore, under the imminent issuance of special treasury bonds, the expectations for RRR and interest rate cuts will gradually escalate in the later stage, and the release of easing will be beneficial to the market.
On the whole, the mainland is about to issue ultra-long-term special treasury bonds, which will release a stronger signal of positive fiscal policy, which will be conducive to sustained economic recovery and transformation. Under the expectation of a positive economy, the stock market will bring an overall boost and emotional stimulation, and with the further release of easing signals, the overall stability of market liquidity will also help the overall market to improve expectations. Of course, it will take time for the economy to continue to recover, especially under the current weak economic recovery, and the stages may still be repeated, so it is necessary to pay due attention to the rhythm.