An advertisement for national bonds is displayed inside a bank in Hai'an city, Nantong, East China's Jiangsu Province on May 24, 2024. A total of 40-billion-yuan ($5.63 billion) worth of 20-year ultra-long-term special government bonds are being issued as part of a massive 1-trillion-yuan planned sale of such bonds. The issuance is an important part of this year's proactive fiscal policies. Photo: VCG

China's issuance of special bonds since the beginning of the year has exceeded 1 trillion yuan ($138.021 billion), underscoring policymakers' determination to sustain a steady economic recovery by launching effective fiscal measures.

Social funds raised via treasury bonds and special bonds can be directly deployed in certain projects, and the stimulating effect on the economy will be prominent, Xi Junyang, a professor at the Shanghai University of Finance and Economics, told the Global Times on Wednesday.

Local governments in China have accelerated the issuance of special bonds. From May 1 to May 28 alone, 100 new special bonds were issued, with a total value of about 299 billion yuan. In April, 31 new special bonds were issued, with a size of about 88.3 billion yuan, according to media reports.

As a result, the issuance of new special bonds since the beginning of the year has exceeded 1 trillion yuan, reaching 1.02 trillion yuan. In terms of investment areas, municipal and industrial park infrastructure, transportation infrastructure and public livelihood services are the key options. 

Data from the National Bureau of Statistics showed that fixed-asset investment reached 14.34 trillion yuan from January to April, up 4.2 percent year-on-year, and investment in infrastructure construction grew 6 percent.

"Aside from raising social funds, special bonds and treasury bonds can direct investment from the private business sector and initiate a positive cycle amid the current economic recovery," Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times on Wednesday.

China issued 40 billion yuan worth of 20-year ultra-long special treasury bonds on Friday, as part of a massive 1 trillion yuan planned sale of such bonds. It was also the second batch of 1 trillion yuan in bonds, after the first batch debuted in the market on Wednesday and received solid demand.

It came after a meeting of the Political Bureau of the Communist Party of China Central Committee on April 30, which stated that ultra-long special treasury bonds should be issued at an early stage and put to good use, while the issuance and utilization of special-purpose bonds should be expedited.

China's National Development and Reform Commission announced on April 23 that the commission itself and the Finance Ministry had confirmed about 38,000 special bond programs in 2024 nationwide, with a demand of about 5.9 trillion yuan. 

The IMF on Wednesday raised China's GDP growth forecast for 2024 to 5 percent, up 0.4 percentage points from its World Economic Outlook report released in April, demonstrating improving expectations for a solid recovery in the world's second-largest economy.

Xi, the professor, emphasized that economic headwinds should not be ignored, and said that it is necessary to ensure concrete fiscal policies that would be implemented in a bid to achieve China's annual GDP growth target of 5 percent.