As our country's economic development enters a new stage to support the construction of major national strategic projects and the process of national rejuvenation, the issuing plan for the ultra-long-term special government bonds for the year 2024 was announced today. According to the arrangements released by the Ministry of Finance, this special government bond issuance will be divided into terms of 20 years, 30 years, and 50 years. Among them, the 30-year special government bond will be issued on May 17th, the 20-year on May 24th, and the 50-year on June 14th.
The ultra-long-term special government bonds are issued periodically during specific times for specific purposes. This issuance's term will be significantly longer than in previous rounds, which will help improve the capital flow cycle, smooth out the pressure of principal and interest repayment, and better play the stable role of government bond funds. This move aims to provide long-term, stable financial support for the implementation of major national strategies and the construction of safety capabilities in key areas.
According to He Daixin, the director of the Fiscal Research Office at the Institute of Finance and Economics Strategy of the Chinese Academy of Social Sciences, the issuance of ultra-long-term special government bonds will help optimize the debt cycle's capital flow. This will support major construction projects in fields such as technological innovation, urban-rural integrated development, and food and energy security.
However, market analysts have pointed out that the issuance of special government bonds inevitably causes some disturbance to the debt market, with the extent of the effect mainly depending on the coordination strength of monetary policies. In past rounds of special government bond issuances, the flexibility of monetary policy and the balance between supply and demand became key. During the special government bond issuance in 2020, a tightening of monetary policy led to resonance in the primary and secondary markets, resulting in rising interest rates; while in 2023, despite relatively stable monetary policies, the supply of special government bonds still had some impact on the liquidity, which required resolution through central bank funding and fiscal spending.
