Exclusive: China plans record $411 billion special treasury bond issuance next year

According to sources familiar with the plan, China is set to issue 3 trillion yuan ($411 billion) in special treasury bonds in 2025, marking its largest-ever issuance. The record-breaking move aims to counter economic challenges, including anticipated U.S. tariff hikes under Donald Trump’s incoming administration. The funds will target a mix of initiatives, including consumer subsidies, advanced manufacturing, and infrastructure projects, as Beijing seeks to stabilize the economy amid deflationary pressures. Treasury yields rose slightly following the announcement, reflecting market expectations of increased fiscal support.

The funds will be allocated to “two major” and “two new” programs. The “new” initiatives focus on boosting consumption through trade-in subsidies for durable goods and incentivizing businesses to upgrade equipment. Meanwhile, the “major” projects emphasize national priorities such as railway construction, airport development, and farmland improvements. Over 1 trillion yuan will also go towards fostering “new productive forces,” including investments in electric vehicles, robotics, and green energy, while a portion will recapitalize state banks struggling with faltering profits and rising bad loans.

This move follows President Xi Jinping’s Central Economic Work Conference, which underscored the need for steady growth and increased fiscal measures in 2025. As exports face potential tariffs exceeding 60% and domestic consumption remains weak amid falling property prices, the bond issuance reflects Beijing’s reliance on fiscal tools to drive economic recovery. With a growth target of 5% for next year, officials are expected to unveil more details during the annual parliamentary session in March. China’s economic strategy highlights the urgent need to balance external risks with domestic revitalization.