By South China Morning Post | Created at 2024-11-20 02:01:48 | Updated at 2024-11-20 04:26:18
2 hours ago
China announced on Friday it has sold a cumulative 1 trillion yuan (US$138.12 billion) in ultra-long-term special government bonds this year, following 22 discrete issuances.
Distribution of these bonds, the first since 2020, began after Premier Li Qiang revealed the country would make use of the instrument for government funding at the annual session of the National People’s Congress – China’s top legislature – on March 5.
Why are these bonds ‘special’?
The ultra-long-term special government bonds the government sold this year came with a range of investment terms – reaching maturity after 20 years, 30 years or 50 years – and yield rates from 2.19 per cent to 2.57 per cent.
As indicated by the name, these bonds are designated for specific, or “special” purposes.
Before this year, China had only issued bonds of this type on three occasions.
The first was in 1998, to support state bank reconstruction during the Asian financial crisis. In 2007, 1.55 trillion yuan was raised to help establish the China Investment Corporation. The most recent issuance was in 2020, for uses related to pandemic prevention and recovery.
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