Beijing announces “ultra-long” special bonds issuance to fund strategic projects
China has set its sights on achieving approximately 5% GDP growth for the year 2024, unveiling ambitious plans to rejuvenate its economy through significant policy adjustments. This objective was detailed in the Government Work Report during the inauguration of the National People’s Congress’ annual assembly. Alongside growth targets, China has introduced the issuance of “ultra-long” special bonds aimed at financing pivotal national projects, underscoring a proactive approach to economic revitalization.
Premier Li Qiang, in delivering the report, announced the removal of foreign investment restrictions in manufacturing, signalling a welcoming stance towards international capital. Furthermore, the country has adjusted its deficit-to-GDP ratio to 3%, a reduction from the previous year’s revised 3.8%, emphasizing fiscal prudence in the face of economic challenges.
The issuance of 1 trillion yuan in special treasury bonds alongside 3.9 trillion yuan in special-purpose bonds for local governments highlights China’s commitment to bolstering infrastructure and supporting local economies. This strategic financial manoeuvre is expected to play a crucial role in propelling China’s long-term growth ambitions and addressing immediate fiscal needs.
China’s economic blueprint for 2024 also addresses employment and inflation, with aims to maintain an urban unemployment rate at approximately 5.5%, generate 12 million new urban jobs, and cap the consumer price index increase at around 3%. These targets mirror the previous year’s objectives, reflecting a consistent policy approach to managing the nation’s economic health.
Amidst global economic fluctuations and domestic challenges, including the real estate sector’s downturn and concerns over local government debt, China’s comprehensive strategy demonstrates a balanced approach to fostering growth, enhancing stability, and mitigating risks. As Beijing navigates through these complex dynamics, the world watches closely how these policies will unfold and their impact on both the Chinese economy and global markets.
