Chinese authorities have approved a record 3 trillion yuan ($411 billion) special treasury bond issuance for 2025, according to two sources familiar with the discussions. The move marks a significant increase from this year’s 1 trillion yuan issuance as Beijing intensifies fiscal measures to address economic challenges.
The funds will target initiatives such as consumer subsidies, business equipment upgrades, and investments in innovation-driven sectors, the sources revealed. These programmes aim to counteract deflationary pressures and mitigate the anticipated economic impact of increased US tariffs on Chinese imports when Donald Trump assumes the US presidency in January.
The State Council Information Office, the finance ministry, and the National Development and Reform Commission (NDRC) did not immediately respond to requests for comment. Meanwhile, news of the planned bond issuance pushed China’s 10-year and 30-year treasury yields up by 1 basis point and 2 basis points, respectively.
The planned issuance reflects Beijing’s readiness to utilise extraordinary debt instruments to support its economic goals. Unlike traditional bonds, special treasury bonds are typically excluded from China’s annual budget, as they are used for specific projects or policy measures.
According to the sources, approximately 1.3 trillion yuan of the funds will support “two major” and “two new” programmes. The “new” initiatives include subsidies for consumers trading in old cars or appliances and discounts for businesses upgrading large-scale equipment. The “major” projects focus on national strategies such as railway and airport construction, farmland development, and enhancing security capacities.
In addition, a substantial portion of the proceeds will be allocated to “new productive forces,” a term used by Beijing for advanced manufacturing sectors like electric vehicles, semiconductors, robotics, and green energy.
Over 1 trillion yuan is expected to be earmarked for these areas. The remaining funds will recapitalise major state banks struggling with shrinking margins, declining profits, and rising bad loans.
The new issuance will equate to 2.4% of China’s 2023 GDP, a sharp contrast to the 1.55 trillion yuan raised via similar bonds in 2007, which accounted for 5.7% of the country’s economic output at the time.
The decision follows the Central Economic Work Conference (CEWC) on 11–12 December, where President Xi Jinping and top officials outlined the economic strategy for 2025. A state media summary of the meeting emphasised the need to maintain steady economic growth, raise the fiscal deficit ratio, and issue more government debt.
Specific targets, including the bond issuance, will be officially announced during the annual parliamentary session in March.
China’s economy faces multiple challenges, including a severe property market crisis, high local government debt, and weak consumer demand.
The potential for increased US tariffs poses additional risks to exports, which have been one of the economy’s few bright spots. To offset these challenges, Beijing plans to expand its consumer goods and industrial equipment trade-in programmes to include more products and sectors.
Weak household demand, driven by declining property values and limited social welfare, remains a significant obstacle to sustained domestic growth. However, the record treasury bond issuance signals Beijing’s commitment to driving economic recovery through targeted fiscal interventions.
Faridah Abdulkadiri
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