China plans $411bn special treasury bond issuance in 2025, which would be the highest on record, as Beijing ramps up fiscal stimulus to revive a faltering economy.
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China to Issue $411 Billion Special Treasury Bonds in 2025 to Boost Economy
Chinese authorities have reportedly approved the issuance of 3 trillion yuan ($411 billion) worth of special treasury bonds in 2025—the largest issuance on record.
This bold fiscal move aims to stimulate economic growth, counter deflationary pressures, and prepare for potential US tariff hikes under a possible Donald Trump administration.
Key Objectives of the $411 Billion Treasury Bond Issuance
The proceeds from these bonds will target critical sectors and initiatives, focusing on:
- Boosting Consumption via subsidy programs.
- Encouraging Equipment Upgrades for businesses.
- Investing in Innovation-Driven Sectors such as AI, robotics, and green energy.
- Strengthening National Infrastructure with investments in railways, airports, and farmland development.
Economic Stimulus Through Targeted Programs
1. Two “Major” Programs
The treasury bonds will support projects that align with national strategies, including:
- Infrastructure Development: Railways, airports, and farmlands.
- Security Enhancements: Bolstering capacity in key security areas.
2. Two “New” Programs
New initiatives will address both consumer and industrial needs:
- Subsidy Program for Durable Goods: Discounts on trade-ins for old cars and appliances.
- Equipment Upgrade Subsidies: Financial incentives for businesses to modernize operations.
Investment in Advanced Manufacturing and Innovation
A significant share of the bond proceeds, over 1 trillion yuan, will be directed towards developing “new productive forces”, including:
- Electric Vehicles (EVs)
- Robotics
- Semiconductors
- Green Energy Technologies
This strategic focus underscores Beijing’s commitment to technological self-reliance and sustainable growth.
Recapitalizing State-Owned Banks
Part of the funds will address the financial health of large state-owned banks, which are grappling with:
- Shrinking Profit Margins
- Rising Bad Loans
- Lower Profitability
This recapitalization aims to strengthen the banking sector and ensure financial stability.
Economic Context and Global Trade Concerns
China’s economy faces significant headwinds:
- Property Market Crisis
- High Local Government Debt
- Weak Consumer Confidence
With US tariffs potentially exceeding 60% on Chinese imports, reliance on domestic consumption and investment becomes crucial for maintaining economic growth targets.
Fiscal Strategy and Long-Term Outlook
The planned special treasury bond issuance equates to 2.4% of China’s 2023 GDP and will play a pivotal role in supporting the government’s 2025 economic growth target of around 5%.
While official figures for fiscal deficit and debt issuance will be announced in March 2025, the current strategy signals Beijing’s willingness to take bold fiscal measures to counter economic challenges.
Looking Ahead: China plans $411bn special treasury bond issuance in 2025
As China navigates global uncertainties and internal economic pressures, the $411 billion treasury bond issuance represents a monumental step towards stabilizing growth, fostering innovation, and reinforcing financial resilience.
The global markets will be closely watching Beijing’s fiscal moves and their impact on domestic growth and international trade relations.
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China plans $411bn special treasury bond issuance in 2025, which would be the highest on record, as Beijing ramps up fiscal stimulus to revive a faltering economy.
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