(Reuters) – Chinese authorities have agreed to issue special Treasury bonds worth 3 trillion yuan (395.57 billion euros) next year, two sources told Reuters, which would be the amount the highest on record, as Beijing steps up fiscal stimulus.
The sovereign debt issuance plan for 2025 would represent a sharp increase from this year’s 1 trillion yuan and comes as Beijing prepares to blunt the effects of an expected increase in U.S. tariffs on Chinese imports with Donald Trump’s return to the White House in January.
The revenue will be aimed at boosting consumption through subsidy programs, equipment upgrades by companies and financing investments in high-tech, innovation-driven sectors, among other initiatives, the sources said.
The State Council Information Office did not immediately respond to a Reuters request for comment.
The special Treasury bond issue planned for next year would be the largest on record and underscores Beijing’s willingness to take on even more debt to counter deflationary forces in the world’s second-largest economy.
A significant portion of next year’s projected revenue, up to 1 trillion yuan according to one source, will be devoted to investments in “new productive forces,” Beijing’s term for advanced manufacturing, such as electric vehicles, robotics, semiconductors and green energy, the sources said.
The rest will be used to recapitalize big state-owned banks, the sources said, as major lenders face squeezed margins, falling profits and a rising cost of risk.
(Reuters reporting; Bertrand De Meyer, editing by Kate Entringer)
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