Chinese policymakers plan to sell a record 3 trillion yuan (US$411.1 billion) of special treasury bonds next year, as the government seeks to boost the slowing economy, Reuters reported yesterday.
Funds raised from the bonds would be used to support consumption subsidies, business equipment upgrades, and investments in key technology and advanced manufacturing sectors, according to Reuters, which cited two unnamed sources.
Some of the proceeds would also be used to inject capital into large state banks, it said.
Photo: Reuters
Greater fiscal stimulus would help the world’s second-largest economy buffer against expected headwinds from the administration of US president-elect Donald Trump, which has threatened to impose steep tariffs on Chinese imports.
China’s CSI 300 equity benchmark gained about 1 percent after the report, before paring gains. Chinese government bonds extended losses, with the 10-year yield rising four basis points to 1.72 percent from a record-low close in the previous session.
China’s special sovereign bonds are issued for specific purposes — such as financing COVID-19 pandemic-related spending — and therefore are not counted toward the headline budget deficit. The size of the potential bond sales would exceed the 1 trillion yuan sold this year and become the highest on record.
“It’s bigger than our expectations and shows the government’s willingness to shore up growth through a more sizable fiscal stimulus,” Societe Generale SA China economist Michelle Lam (林雪潔) said.
About 1.3 trillion yuan of the funds to be raised would be used to support a consumer product and business equipment trade-in program, as well as major construction projects, Reuters said.
Apart from that, more than 1 trillion yuan would be used to invest in “new productive forces,” which stand for advanced manufacturing sectors such as electric vehicles, Reuters reported.
The rest of the funds would be used to recapitalize large state banks as their profit margins are narrowing, it said.
China would “expand the magnitude of fiscal spending and accelerate the spending pace,” the Chinese Ministry of Finance said yesterday in a statement following a two-day national conference on fiscal work next year.
Intel Corp chief executive officer Lip-Bu Tan (陳立武) is expected to meet with Taiwanese suppliers next month in conjunction with the opening of the Computex Taipei trade show, supply chain sources said on Monday. The visit, the first for Tan to Taiwan since assuming his new post last month, would be aimed at enhancing Intel’s ties with suppliers in Taiwan as he attempts to help turn around the struggling US chipmaker, the sources said. Tan is to hold a banquet to celebrate Intel’s 40-year presence in Taiwan before Computex opens on May 20 and invite dozens of Taiwanese suppliers to exchange views
Application-specific integrated circuit designer Faraday Technology Corp (智原) yesterday said that although revenue this quarter would decline 30 percent from last quarter, it retained its full-year forecast of revenue growth of 100 percent. The company attributed the quarterly drop to a slowdown in customers’ production of chips using Faraday’s advanced packaging technology. The company is still confident about its revenue growth this year, given its strong “design-win” — or the projects it won to help customers design their chips, Faraday president Steve Wang (王國雍) told an online earnings conference. “The design-win this year is better than we expected. We believe we will win
Chizuko Kimura has become the first female sushi chef in the world to win a Michelin star, fulfilling a promise she made to her dying husband to continue his legacy. The 54-year-old Japanese chef regained the Michelin star her late husband, Shunei Kimura, won three years ago for their Sushi Shunei restaurant in Paris. For Shunei Kimura, the star was a dream come true. However, the joy was short-lived. He died from cancer just three months later in June 2022. He was 65. The following year, the restaurant in the heart of Montmartre lost its star rating. Chizuko Kimura insisted that the new star is still down
While China’s leaders use their economic and political might to fight US President Donald Trump’s trade war “to the end,” its army of social media soldiers are embarking on a more humorous campaign online. Trump’s tariff blitz has seen Washington and Beijing impose eye-watering duties on imports from the other, fanning a standoff between the economic superpowers that has sparked global recession fears and sent markets into a tailspin. Trump says his policy is a response to years of being “ripped off” by other countries and aims to bring manufacturing to the US, forcing companies to employ US workers. However, China’s online warriors
RSS