China's Bold Fiscal Push: Ultra-Long Bonds to Revitalize Economy

China plans to enhance fiscal stimulus in 2025 through ultra-long treasury bonds, boosting business investments and consumer spending. These bonds will fund subsidies for durable goods, digital products, and large-scale equipment upgrades. Major projects include infrastructure construction, with potential interest rate cuts to support growth amid economic challenges.

China is set to significantly amplify its fiscal stimulus strategy in 2025 by increasing funding from ultra-long treasury bonds, according to a top official from the state planning agency. This move aims to stimulate both business investments and consumer expenditure as Beijing seeks to reinvigorate its struggling economy.

Special treasury bonds are earmarked to fund new initiatives, National Development and Reform Commission official Yuan Da announced. These initiatives include a subsidy program for durable goods that allows consumers to exchange aging cars and appliances for discounted new ones, alongside a scheme subsidizing large-scale equipment upgrades for enterprises.

This year, households will receive subsidies to purchase digital products such as cell phones and smart gadgets, Yuan revealed. With plans for robust infrastructure projects and possible interest rate cuts, China remains hopeful about overcoming recent economic hurdles, including a severe property crisis and high local government debt.

(With inputs from agencies.)