More than half of the planned issuance of ultra-long-term special treasury bonds totaling 1.3 trillion yuan is about to be completed

The Ministry of Finance issued a notice recently, saying that on July 3, the Ministry of Finance will bid to issue 80 billion yuan in ultra-long-term special government bonds, with a term of 30 years. This will be the first tranche of ultra-long-term special government bonds to be issued in the third quarter.

At the same time, according to the Ministry of Finance’s published arrangements for third-quarter government bond issuance, in the third quarter the Ministry of Finance will issue 11 tranches of ultra-long-term special government bonds, with 3 tranches in July, 4 tranches in August, and 4 tranches in September. Overall, the number of issuance rounds in the third quarter will be two more than in the second quarter (9 tranches).

Judging from the issuance of ultra-long-term special government bonds in the first half of the year, since the first issuance in April, a total of 9 tranches were issued in the first half, with the issuance size reaching 572 billion yuan. The issuance progress (the planned issuance size for this year is 1.3 trillion yuan) reached 44%. After the issuance of the ultra-long-term special government bonds planned for July 3 is completed, the cumulative issuance size this year will reach 652 billion yuan, and issuance progress will exceed 50%.

“The issuance pace of ultra-long-term special government bonds in the first half started early and delivered more forceful efforts, advancing efficiently.” Zhu Huale, a senior investment consultant at Shaanxi Jufeng Investment Information Co., Ltd., said in an interview with Securities Daily. He added that the third-quarter issuance plan has been increased to 11 tranches, maintaining the strength of fiscal support, balancing steady growth with the need to foster new quality productive forces. It will continue to expand effective investment and stimulate domestic demand consumption, while also relying on ultra-long maturities to match the funding needs of major projects over long cycles—sending a clear signal that the fiscal policy will provide stronger, sustained support for economic development and optimize the industrial structure.

This year’s Government Work Report has stated that 1.3 trillion yuan in ultra-long-term special government bonds is planned to be issued to continuously support the “two major areas” construction and the “two new” initiatives, among other efforts.

Notably, on June 26, the National Development and Reform Commission said that recently it, together with the Ministry of Finance, allocated a third batch of 62.5 billion yuan in ultra-long-term special government bonds to local governments for funding the “trade-in of consumer goods to replace old ones” support program.

“By the end of June, all the 200 billion yuan equipment renewal project lists for this year and the third batch of 62.5 billion yuan consumer goods trade-in to replace old ones funds had been fully allocated. Since June, the issuance speed of special-purpose treasury bonds has accelerated, with incremental issuance exceeding 570 billion yuan, reaching the highest level since the start of this year. Combined with the advancement of the ‘six networks’ and the sequential commencement of major engineering projects whose conditions have matured, strong support will be provided for infrastructure and consumption,” Wen Bin, chief economist at China Minsheng Bank, said to Securities Daily.

The National Development and Reform Commission said that this year, the National Development and Reform Commission and relevant departments, including the Ministry of Finance, have conscientiously implemented the decision and deployment of the CPC Central Committee and the State Council on optimizing and implementing the “two new” policy. They have allocated the ultra-long-term special government bond funds supporting the “trade-in of consumer goods to replace old ones” on a quarterly basis and in batches, promoting a steadier pace for the program, ensuring more balanced and orderly use of funds, and enabling the policy effects to continue to emerge.

Zhu Huale said that the ultra-long-term special government bond funds are being allocated quickly and continuously. On one hand, this can accelerate the start and construction of infrastructure and industrial upgrading projects in various regions, quickly forming physical workload and leveraging supporting social capital to boost fixed-asset investment. On the other hand, when combined with the peak season for summer consumption, it can enhance the effectiveness of subsidies and pull major categories of consumption back to recovery, such as household appliances, automobiles, and electronics. At the same time, it will continue to empower efforts to fill gaps in areas like science and technology innovation, green development, and safety, achieving coordinated two-way efforts between investment and consumption. This will help consolidate the recovery foundation for the economy in the third quarter, balancing short-term steady growth with the long-term cultivation of new quality productive forces, strengthening the role of more proactive fiscal policy in counter-cyclical adjustment, and stabilizing market expectations.

[Author: Han Yu] (Editor: Wen Jing)

Keywords:

                                                            Ultra-long-term special government bonds