China Considers Ultra-Long-Term Treasury Bonds for Economic Stimulus

HONG KONG (Reuters) – China may issue ultra-long-term treasury bonds within two years, aiming to generate at least 10 trillion yuan ($1.4 trillion) in economic stimulus, according to a former central bank adviser reported by state media.

Liu Shijin, former vice president of the Development Research Center of the State Council, emphasized the need for a basket of measures, including:
– Enhancing social protections
– Purchasing unsold apartments to improve affordable housing
– Accelerating urban construction

Liu advised against copying the quantitative easing strategies of developed nations, advocating instead for China’s macroeconomic policies to prioritize stability and balance during a period of “medium-speed growth.”

Analysts and policy advisers predict that Chinese policymakers are likely to enhance measures to achieve this year’s challenging growth target of approximately 5%, with a strong emphasis on boosting demand to counteract persistent deflation.

Recent economic data for August indicate that the recovery of China’s export-led economy remains weak, with domestic demand struggling to gain momentum amidst ongoing deflationary threats.

($1 = 7.0505 Chinese yuan renminbi)