MNI BRIEF: China To Issue CNY1 Trillion Ultra-long Treasuries

China will issue CNY1 trillion of ultra-long special treasury bonds in 2024 and lower the deficit-to-GDP ratio to 3%, said Premier Li Qiang when releasing the government work report during the opening ceremony of the National People’s Congress on Tuesday.

“Over each of the next several years, the ultra-long special treasury bonds will continue to be issued” in a bid to implement major national strategies and build up security capacity in key areas, Li said. The deficit/GDP ratio was set at 3%, compared with 3.8% in 2023, as policymakers take into account both development needs and fiscal sustainability, the report noted. As a result, the government deficit will print at CNY4.06 trillion, an increase of CNY180 billion over the 2023 budget figure, the report added.

CNY3.9 trillion yuan of local government special-purpose bonds will be issued, an increase of CNY100 billion over last year, the report showed, stressing authorities will more effectively channel the fund and expand the range of its use, the report noted. Authorities will further reform the investment approval system and strive to push a new round of tax reform, it said

MNI reported last month loft local government GDP targets would drive more central government borrowing. (See MNI: High Local Targets Hint At Further China Gov. Leverage)