China’s Bold Move: Selling $138 Billion in Long-Dated Sovereign Bonds to Boost Its Stagnant Economy”.

China’s economy has been facing challenges such as deflation, stagnant growth, and a property-market crisis in recent years. To address these issues, the Chinese government has announced plans to sell $138 billion in long-dated sovereign bonds. The finance ministry revealed that China will begin selling 30-year sovereign bonds worth 40 billion yuan ($5.5 billion) this week, with the goal of raising a total of 1 trillion yuan ($138 billion) through multiple sales. This marks the first time since 2020 and only the fourth time in the past 26 years that China has raised debt through the sale of long-dated bonds.

The decision to issue ultra-long sovereign bonds was announced in March by Premier Li Qiang, who emphasized the need to address significant risks facing the economy while setting a growth target of 5%. Despite challenges such as insufficient demand, overcapacity in certain industries, weak societal expectations, and lingering risks, China remains focused on achieving economic recovery and improvement. The country’s economy has been impacted by the pandemic, leading to policymakers grappling with deflation and stagnation. Additionally, an ongoing property-market crisis has resulted in the collapse of large developers like Evergrande and Country Garden.

Li’s announcement of the long-duration bond sale underscores the government’s commitment to supporting economic growth and addressing key challenges to ensure future stability and prosperity. By raising funds for major national strategies and enhancing security capacity in key areas, China hopes to reignite its faltering economy and overcome these obstacles.