China Plans Massive Bond Sale to Boost Economy, Report Says
China’s policymakers are reportedly planning a substantial economic stimulus package, with a record 3 trillion yuan ($411 billion) in special treasury bonds slated for sale in 2025, Bloomberg reports, citing Reuters.
This move signifies a significant ramp-up in government spending aimed at revitalizing the country’s slowing economy.
The proposed bond sale is a sharp increase from the 1 trillion yuan issued this year and would be used to fuel consumption and investments, as well as recapitalize major state-owned banks, Reuters reported, citing two anonymous sources. The initiative reflects growing concerns about China’s economic growth, which has faced challenges in recent quarters.
This large-scale fiscal intervention comes after a period of relatively conservative fiscal stimulus in China. As the accompanying chart highlights, the broad budget deficit, which includes both the official deficit and additional special bonds, has remained relatively controlled in recent years.
The 2025 plan indicates a willingness by policymakers to take a more aggressive approach to address economic headwinds. The proceeds from the bond sales are expected to bolster key sectors and provide much-needed liquidity to the financial system.
While the exact details of how the funds will be allocated are still emerging, the sheer scale of the proposed issuance signals a clear intention by the Chinese government to proactively stimulate economic activity. The increased spending aims to drive growth and boost confidence in the world’s second-largest economy.
