Tiagong, China want to issue Narional Bond liao to huat big big

[k1976]

 

[k1976]

https://www.china-briefing.com/news...24, China's central,the final quarter of 2023.


1 trillion bond...dun. huat also cannot de woh

 

[k1976]

https://www.cnbc.com/2023/10/25/chi...bt-plan-isnt-necessarily-such-a-big-deal.html

Why China’s 1 trillion yuan debt plan isn’t necessarily such a big deal​

PUBLISHED WED, OCT 25 202312:13 AM EDT

Evelyn Cheng@CHENGEVELYN
WATCH LIVE
KEY POINTS

• Chinese authorities late Tuesday announced one of the biggest changes to the national budget in years, along with the issuance of 1 trillion yuan in ($137 billion) in government bonds.
• State media made it clear that whopping amount would focus on reconstruction of areas hit hard by natural disasters — such as this summer’s historic floods.
• “We believe the economic impact of this RMB1.0trn in additional [central government bonds] should not be overstated, especially in the near term,” Nomura’s Chief China Economist Ting Lu said in a note.

 

[k1976]

China to Issue RMB 1 Trillion in Special Treasury Bonds to Local Governments in Q4 2023 and Q1 2024​

November 8, 2023Posted by China BriefingWritten by Arendse HuldReading Time: 4 minutes
On October 24, China’s central government confirmed that it will issue an additional RMB 1 trillion (approx. US$137.4 billion) worth of special treasury bonds (STBs) in the final quarter of 2023. The China treasury bonds, which will be issued to local governments through transfer payments, will help with post-disaster recovery and reconstruction following a summer of severe natural disasters in several areas of the country.

---

The bond issuance was approved by the Sixth Session of the Standing Committee of the 14th National People’s Congress (NPC), which voted to adopt the resolution approving the State Council’s issuance of additional STBs and the 2023 central budget adjustment plan.

Shi Yinghua, a researcher at the Chinese Academy for Financial Sciences stated in a media Q&A that the funds will be used for both short-term disaster relief and long-term improvement of disaster prevention and resilience.

An official at the Ministry of Finance (MOF) stated that the STBs will be issued “in a timely manner”, and that the MOF has made adjustments to the fourth-quarter national debt issuance plan to create space for additional bond issuance.

Disaster recovery and reconstruction​

The additional funds are meant to support local governments with post-disaster recovery and reconstruction, make up for shortcomings in disaster prevention, reduction, and relief, and improve China’s resilience against natural disasters. This decision comes after several areas of China experienced natural disasters over the last few years, including heavy flooding in Beijing, Hebei, and the northeast, Shaanxi and other northern provinces, and several areas of southern China in the summer and fall of 2023.

FIND BUSINESS SUPPORT
Explore how our virtual CFO can assist you to better guide your company’s sustainable financial performance.

Natural disasters are becoming a more common phenomenon in China, a fact that is troubling the country’s leadership and policymakers. On August 17, the Standing Committee of the Political Bureau of the CPC Central Committee held a meeting “to study and deploy flood prevention, flood relief, and post-disaster recovery and reconstruction work”. The outcome of the meeting was to “accelerate recovery and reconstruction” and “further enhance China’s disaster prevention, reduction, and relief capabilities.”

An MOF official said that although the budget set at the beginning of the year had included funds for disaster relief and prevention work, it was not enough to meet the funds needed to improve local disaster prevention, reduction, and relief capabilities.

The additional bonds will be issued in two batches, with RMB 500 billion (US$68.7 billion) in the fourth quarter of 2023 and the other RMB 500 billion carried forward to be used in early 2024.

The Ministry of Finance (MOF) stated that the funds will be used in eight major areas:

• Post-disaster recovery and reconstruction;
• Key flood control projects;
• Natural disaster emergency response capability improvement projects;
• Other key flood control projects;
• Irrigation area construction and renovation and key soil and water loss control projects;
• Action to improve urban drainage and flood prevention capabilities;
• Comprehensive prevention and control system construction projects for major natural disasters; and
• High-standard farmland construction in Northeast China and disaster-stricken areas in the Beijing-Tianjin-Hebei region.

As a result of the additional STBs, the national fiscal deficit will increase from RMB 3.88 trillion (US$532.9 billion) to RMB 4.88 trillion (US$670.2 billion), while the deficit rate is expected to increase from 3 percent to about 3.8 percent of GDP.

Is this stimulus?​

There are growing expectations that the central government will approve a stimulus package to boost China’s post-pandemic recovery. Despite suggestions that stimulus will be rolled out, no package has yet been announced.

While the issuance of additional STBs will offer a significant funding boost for local governments – and thereby help grow the local economy – central government officials have been clear that the funds are meant to help with disaster relief and prevention and therefore are not direct stimulus.

China to Issue RMB 1 Trillion in Special Treasury Bonds to Local Governments in Q4 2023 and Q1 2024​

November 8, 2023Posted by China BriefingWritten by Arendse HuldReading Time: 4 minutes
On October 24, China’s central government confirmed that it will issue an additional RMB 1 trillion (approx. US$137.4 billion) worth of special treasury bonds (STBs) in the final quarter of 2023. The China treasury bonds, which will be issued to local governments through transfer payments, will help with post-disaster recovery and reconstruction following a summer of severe natural disasters in several areas of the country.

---

The bond issuance was approved by the Sixth Session of the Standing Committee of the 14th National People’s Congress (NPC), which voted to adopt the resolution approving the State Council’s issuance of additional STBs and the 2023 central budget adjustment plan.

Shi Yinghua, a researcher at the Chinese Academy for Financial Sciences stated in a media Q&A that the funds will be used for both short-term disaster relief and long-term improvement of disaster prevention and resilience.

An official at the Ministry of Finance (MOF) stated that the STBs will be issued “in a timely manner”, and that the MOF has made adjustments to the fourth-quarter national debt issuance plan to create space for additional bond issuance.

Disaster recovery and reconstruction​

The additional funds are meant to support local governments with post-disaster recovery and reconstruction, make up for shortcomings in disaster prevention, reduction, and relief, and improve China’s resilience against natural disasters. This decision comes after several areas of China experienced natural disasters over the last few years, including heavy flooding in Beijing, Hebei, and the northeast, Shaanxi and other northern provinces, and several areas of southern China in the summer and fall of 2023.

FIND BUSINESS SUPPORT
Explore how our virtual CFO can assist you to better guide your company’s sustainable financial performance.

Natural disasters are becoming a more common phenomenon in China, a fact that is troubling the country’s leadership and policymakers. On August 17, the Standing Committee of the Political Bureau of the CPC Central Committee held a meeting “to study and deploy flood prevention, flood relief, and post-disaster recovery and reconstruction work”. The outcome of the meeting was to “accelerate recovery and reconstruction” and “further enhance China’s disaster prevention, reduction, and relief capabilities.”

An MOF official said that although the budget set at the beginning of the year had included funds for disaster relief and prevention work, it was not enough to meet the funds needed to improve local disaster prevention, reduction, and relief capabilities.

The additional bonds will be issued in two batches, with RMB 500 billion (US$68.7 billion) in the fourth quarter of 2023 and the other RMB 500 billion carried forward to be used in early 2024.

The Ministry of Finance (MOF) stated that the funds will be used in eight major areas:

• Post-disaster recovery and reconstruction;
• Key flood control projects;
• Natural disaster emergency response capability improvement projects;
• Other key flood control projects;
• Irrigation area construction and renovation and key soil and water loss control projects;
• Action to improve urban drainage and flood prevention capabilities;
• Comprehensive prevention and control system construction projects for major natural disasters; and
• High-standard farmland construction in Northeast China and disaster-stricken areas in the Beijing-Tianjin-Hebei region.

As a result of the additional STBs, the national fiscal deficit will increase from RMB 3.88 trillion (US$532.9 billion) to RMB 4.88 trillion (US$670.2 billion), while the deficit rate is expected to increase from 3 percent to about 3.8 percent of GDP.

Is this stimulus?​

There are growing expectations that the central government will approve a stimulus package to boost China’s post-pandemic recovery. Despite suggestions that stimulus will be rolled out, no package has yet been announced.

While the issuance of additional STBs will offer a significant funding boost for local governments – and thereby help grow the local economy – central government officials have been clear that the funds are meant to help with disaster relief and prevention and therefore are not direct stimulus.

RELATED READING
Get help with financial statement audits, yearly statutory audits, internal and management review, accounting health check, and GAAP conversion.

As the Director of the Department of Finance at the School of Economics at Peking University Liu Yi explained in a media Q&A, local governments are currently under pressure to resolve local government debt risks and ensure expenditure for basic welfare, wages, and operations. This means there is little room for local governments to significantly increase funding for these types of projects through their own financial resources.

She also added that the issuance of STBs will “help drive domestic demand and further consolidate the economic recovery”.

At the same time, the additional bond issuance may be a pragmatic move to maintain steady infrastructure investment in the final quarter of the year, as local governments run out of another key financing tool, special-purpose bonds (SPBs). SPBs are one of the main ways that the central government provides funds to local governments to bankroll major infrastructure projects. Infrastructure investment has been a key driver of China’s economic boom over the last four decades and continues to be an important mechanism for driving post-pandemic recovery.

In March 2023, the government set an annual quota of RMB 3.8 trillion (approx. US$549.2 billion) for its local government SPBs. Local governments were required to issue all of their SPB quotas by the end of September 2023 and invest all of the funds raised into projects by the end of October 2023. This means funding for further investment through the end of the year will have dried up. The issuance of these additional STBs is therefore also another mechanism for the central government to transfer funds to local governments, thereby ensuring that infrastructure investment maintains momentum through the end of the year.

 

[laksaboy]

The death throes of a dying regime.

 

[Eisenhut]

What does it mean? Is it like DBS minibond that can spread China debt all over world?

 

[k1976]

What does it mean? Is it like DBS minibond that can spread China debt all over world?

Spread Tiongkok evergreening prosperity to every corner of the world.....Gospel of Huat Huat

 

[aerobwala]

China to kick off 1 trillion yuan stimulus bond issues this week​

Reporting by Reuters China newsroom; Editing by Vidya Ranganathan, Christopher Cushing and Alex Richardson, May 13, 2024 8:06 PM GMT+8 Updated,

SHANGHAI/BEIJING, May 13, 2024 - China's finance ministry plans to start raising 1 trillion yuan ($138 billion) in long-awaited, long-term special treasury bonds this week to raise funds it will use to stimulate key sectors of its flagging economy.

The finance ministry confirmed what four sources had told Reuters earlier on Monday that the 1 trillion yuan ($138.23 billion) of special government bonds would have tenors of 20 to 50 years and issuance will begin on May 17.

The sources who have direct knowledge of the plans said 300 billion yuan worth of 20-year bonds, 600 billion yuan worth of 30-year bonds and 100 billion yuan worth of 50-year bonds would be issued.

China's Premier Li Qiang on Monday urged officials to make good use of the ultra-long special treasury bonds to support the implementation of major national strategies as well as building security capabilities in key areas, state media reported.

China would make coordinated arrangements for key tasks for this year and the next few years, coordinate and make good use of conventional and extraordinary policies, state media said.

The country would also better coordinate government investment and social capital, the report said, citing Li, who chaired the virtual meeting.

Market participants have been waiting for weeks for details of the issuance pipeline of these special treasury bonds, which were first announced during China's parliamentary conference in March.

Given the issuance was foreseen, news of the details caused bond yields to slip slightly. The yield on 30-year bonds fell 2 basis points to 2.55%. It is down 30 bps this year.

Zou Wang, an investment director at Shanghai Anfang Private Fund Management, said that while such a supply of bonds is negative for prices, it had been priced in.
"In addition, the market now expects the central bank to provide liquidity support through cuts in interest rates and reserve requirements," he said.

The finance ministry said 30-year special bonds will be sold in 12 tranches, from May 17 to Nov. 15. It said 20-year bonds will be sold in seven batches beginning May 24, while 50-year bonds will be issued in three tranches from May 17.

Details of the timeline come just after data showed new bank lending in China fell more than market participants expected in April from the previous month while broad credit growth hit a record low.

The expansion of outstanding total social financing (TSF), a broad measure of credit and liquidity in the economy, slowed to 8.3% in April, a record low, from 8.7% in March.

China's economy grew at a faster-than-expected 5.3% pace in the first quarter, offering some relief to officials as they try to work through a property downturn and curtail local government debt. However, indicators show that demand at home remains frail, weighing on overall momentum.

The Financial Times reported earlier in the day that Chinese authorities had kicked off plans to sell the long-dated bonds and the People's Bank of China (PBOC) had asked brokers for advice on pricing. ($1 = 7.2341 Chinese yuan)