Chinese authorities have approved a record issuance of 3 trillion yuan ($411 billion) in private treasury bonds for 2025, according to two sources cited by Reuters. The move signals Beijing’s commitment to using fiscal stimulus to address economic stagnation.
This represents a significant increase from the 1 trillion yuan issued this year and coincides with preparations for potential tariff hikes on Chinese imports as Donald Trump is expected to reassume the U.S. presidency in January.
The proceeds will target initiatives such as consumer subsidies, business equipment upgrades, and investments in innovation-driven sectors. According to the sources, who spoke anonymously due to the sensitivity of the issue, the plan underscores China’s proactive approach to offsetting deflationary pressures.
Officials from the State Council Information Office, Ministry of Finance, and National Development and Reform Commission (NDRC) did not immediately comment on the development.
Following the announcement, yields on China’s 10-year and 30-year treasury bonds rose by 1 basis point and 2 basis points, respectively. The planned issuance, the largest on record, demonstrates Beijing’s willingness to expand borrowing to stabilize the world’s second-largest economy.
China generally reserves ultra-long-term corporate bonds for extraordinary circumstances, reflecting the significance of this initiative.
Approximately 1.3 trillion yuan from the new issuance will fund “two major” and “two new” programs: A consumer subsidy program to encourage trade-ins for new vehicles and appliances, subsidies for large-scale business equipment upgrades, and infrastructure projects in critical sectors, including railways, airports, and farmland.
The NDRC reported that 70% of the proceeds from this year’s bond issuance funded major projects, while the remainder supported new schemes.
Another significant portion, exceeding 1 trillion yuan, will drive investments in advanced manufacturing, including electric vehicles, robotics, semiconductors, and green energy. Additionally, funds will recapitalize state-owned banks struggling with shrinking margins, declining profits, and rising non-performing loans.
The issuance will account for 2.4% of China’s 2023 GDP. For comparison, Beijing’s 2007 issuance of 1.55 trillion yuan represented 5.7% of GDP at the time.
The announcement follows the annual Central Economic Work Conference, where President Xi Jinping and senior officials outlined economic plans for 2025. The state media summary emphasized “steady economic growth,” raising the fiscal deficit ratio, and increasing government debt issuance, without detailing figures.
Recent Reuters reports indicate China may raise its budget deficit to a record 4% of GDP and aim for an economic growth target of around 5% next year.
China’s economy faces multiple headwinds, including a protracted property crisis, rising local government debt, and weak consumer demand. Exports, traditionally a growth driver, risk new U.S. tariffs of over 60%, threatening another economic lifeline.
Domestic consumption remains subdued, with households grappling with falling property values and minimal social safety nets. To counter weak demand, Beijing plans to expand its consumer and industrial equipment swap programs to more products and sectors.
