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Ultra-long special treasury bonds can promote quantitative growth

China Daily | Updated: 2024-06-18 07:28
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Chinese 100 yuan banknotes are seen in a counting machine at a bank in Beijing. [Photo/Agencies]

The Ministry of Finance recently, for the first time, issued 50-year ultra-long special treasury bonds, with a total issue of 35 billion yuan ($4.82 billion).

Maintaining a moderate fiscal deficit and reasonably expanding the scale of national debt issuance will help cope with some domestic economic difficulties and challenges. General public budgetary incomes in the first four months of this year was 8.09 trillion yuan, down 2.7 percent year-on-year. An important reason for this is the decline in tax revenue, especially the value added tax, which fell by 7.6 percent year-on-year. In order to make up the gap of fiscal revenue and expenditure, it is necessary to increase the issuance of government bonds, especially long-term special treasury bonds.

Another set worth 885 billion yuan will be issued from June to November, indicating the accelerated landing of proactive fiscal policies.

The funds raised by the issuance of government bonds are mainly used for public spending and infrastructure construction, which can improve overall economic activity and effective demands, thereby boosting market expectations and confidence. The issuance of government bonds can raise a large amount of available funds for public finances, and these funds will directly stimulate the expansion of investment demand and drive consumer demand.

When treasury funds are used for the construction of infrastructure such as transportation, energy and water conservancy projects, the demand for investment in these areas will increase immediately, not only directly creating a large number of employment opportunities, but also promoting the development of related upstream and downstream industries, which will create more employment opportunities and correspondingly improve people's incomes.

According to this year's Government Work Report, the ultra-long special treasury bonds issued this year are to solve the funding problems of some major projects, and are specifically used for the implementation of major national strategies and security capacity building in key areas. The use of government bonds for these projects pertinent to scientific and technological innovation, key technologies, energy security and other fields can promote the transformation and upgrading of economic structure and steadily improve the efficiency of growth, and help achieve "effective qualitative improvement" and "reasonable quantitative growth" of the economy.


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