Beijing sold 30-year special treasury bonds at a 1.88% coupon on Thursday, a sign the state can secure ultra-long financing at modest cost. The sales were the opening tranches of its 2025 special treasury-bond programme: a 20-year tranche worth 50 billion yuan at 1.98%, a 30-year tranche of 71 billion yuan at 1.88%, and 165 billion yuan of five-year bank-support bonds at 1.45%.
What Beijing put on offer
On 24 April, the Chinese government released the opening batches of its 2025 special treasury bonds, split between ultra-long maturities and bonds earmarked for bank recapitalisation. The ultra-long notes comprised a 20-year tranche of 50 billion yuan at a 1.98% coupon and a 30-year tranche of 71 billion yuan at a 1.88% coupon.
Alongside those ultra-long issues, the government issued 165 billion yuan of special treasury bonds intended to help large state-owned commercial banks replenish capital; the five-year bonds carried a 1.45% coupon. The government flagged the ultra-long and bank-support streams as distinct parts of its 2025 fiscal plan.
Why the government is issuing special bonds
Special treasury bonds are allocated to specific policy goals rather than general budget financing. The government work report lists the ultra-long issues as support for long-lived strategic and industrial objectives, including:
- Major national strategies and strengthening security capacities in priority sectors
- A new round of large-scale equipment upgrades
- Consumer goods trade-in programmes
The ultra-long tenors (20 and 30 years) allow the state to spread the cost of long-lived projects over time, while the five-year bank-support bonds aim to shore up capital buffers at major state-owned lenders so they can sustain lending without destabilising balance sheets.
How the issuance fits into broader fiscal policy
Expanding the ultra-long special bond quota by 300 billion yuan over last year signals a more active fiscal stance for 2025. Using long-dated debt to fund strategic capital formation keeps immediate funding costs modest and helps match asset lives with liabilities for projects expected to deliver benefits over decades.
Separately, the 500 billion yuan quota for bank-support special bonds underlines a banking-sector priority: reinforcing capital positions at large state-owned commercial banks to underpin financial stability.
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The sales begin a programme the government work report says will total 1.3 trillion yuan of ultra-long special bonds for 2025, alongside 500 billion yuan earmarked for bank capital replenishment.
This article was created with AI assistance.
