**Under the overall requirements of "active fiscal policy should be moderately strengthened, quality and efficiency improved", the work report clarifies important incremental measures:Starting from this year, it is planned to issue ultra-long-term special treasury bonds for several consecutive years, which will be specially used for the implementation of major national strategies and security capacity building in key areas, and will first issue 1 trillion yuan this year.
On March 6, Zheng Shajie, director of the National Development and Reform Commission, made this decision and deployment clear at a press conference as "both for the present and for the long-term." In other words, it can not only stimulate current investment and consumption, but also lay the foundation for long-term high-quality development."
Industry insiders interviewed by the Financial Times also generally said that the issuance of ultra-long-term special treasury bonds for several consecutive years has comprehensively considered the dual requirements of China's economic development and fiscal sustainability, and has found the key to a balanced and problematic solution for the active fiscal policy.
Since the special treasury bonds do not include a deficit and their issuance is only included in the management of the balance of treasury bonds in the current year, the issuance of special treasury bonds of one trillion yuan will become an important point of active fiscal development under the condition that the budget deficit rate is conservatively arranged at about 3 percent this year, taking into account the needs of development and fiscal sustainability, and also increasing flexibility and space for future macroeconomic regulation and control. Yuan Haixia, executive director of the China Chengxin International Research Institute, said in an interview with the Financial Times that the special treasury bonds are used for "two-fold", which is conducive to promoting economic growth and structural transformation, and comprehensively promoting the construction of a strong country. In addition, compared with the past, the maturity of this round of ultra-long-term special treasury bonds has been greatly extended, which better matches the capital needs of key projects and improves the efficiency of fiscal funds.
There have been three new special government bonds in history
Special treasury bonds refer to treasury bonds issued for specific targets with a clear purpose, which have the characteristics of earmarked funds, flexible purposes, inclusion in the budget without including the fiscal deficit, and revenue and expenditure. CITIC ** Chief Economist Ming Ming told the Financial Times reporter that from a historical point of view, in order to cope with the challenges and risks in the special period, China's special treasury bonds have had three new experiences. “The first time was in 1998In the face of the problem of high non-performing loan ratio and low capital adequacy ratio of China's commercial banks, the Ministry of Finance issued a 30-year special treasury bond of 270 billion yuan to the four major banks of industry and agriculture, and injected equal capital into the four major banks to supplement their capital; The second time was in 2007With the rapid rise of China's foreign exchange reserves, in order to improve the efficiency of the use of foreign exchange assets, the Ministry of Finance issued 1The RMB 55 trillion special treasury bonds purchased the equivalent of US dollar foreign exchange from the PBOC and used it to inject capital into the establishment of CIC, including the first tranche of private placement and the third tranche of 15-year special treasury bonds. The third time was in 2020The Ministry of Finance publicly issued 1 trillion yuan of special treasury bonds, which were used for public health and other infrastructure construction and anti-epidemic related expenditures through transfer payments, with a maturity of 5 years, 7 years and 10 years. Chen Jianheng, head of fixed income research at CICC's research department, gave a detailed introduction to the Financial Times. In addition, there are two maturity renewals of special treasury bonds, in 2017 and 2022, with an issuance scale of 696.4 billion yuan and 750 billion yuan. It is worth mentioning that in the fourth quarter of last year, the government issued an additional 1 trillion yuan of treasury bonds as special treasury bonds, all of which were arranged to local governments through transfer payments to support post-disaster recovery and reconstruction and improve disaster prevention, mitigation and relief capabilities. However, the 1 trillion yuan of government bonds were included in the budget deficit, so that last year's budget deficit rate increased by 30% to 38%, and its issuance period is relatively concentrated in 1-10 years, corresponding to the construction period of supporting projects or in the short and medium term, which are different from the issuance of ultra-long-term special treasury bonds proposed in the ** work report. Jin Qianjing, chief analyst of Shenwan Hongyuan bonds, told the Financial Times. "Ultra-long-term" and "special treasury bonds" both have profound meanings
Many people in the industry have dismantled the "ultra-long-term special treasury bonds" into two dimensions: "ultra-long-term" and "special treasury bonds" to better understand the underlying policy intentions behind this important decision-making deployment. Yuan Haixia believes that this round of special treasury bonds emphasizes "ultra-long-term", and the issuance period will be significantly increased compared with previous rounds of special treasury bonds, and the overall focus is more on ultra-long-term varieties of 15 years and above, and major projects may be matched with special treasury bonds with a maturity of 30 years and 50 years to enhance the guarantee capacity for long-term projects. Ming Ming also believes that the emphasis on ultra-long-term terms is to "exchange time for space", better support large-scale infrastructure projects and the implementation of the national long-term economic development strategic plan, and smooth the pressure of capital repayment. "On the one hand, at present, China's economic growth is in the stage of shifting gears and improving quality, the short-term capital return of projects tends to decrease, and ultra-long-term financial financing tools can alleviate the pressure of short- and medium-term debt repayment; On the other hand, with the aging of China's population and the structural transformation of the economy, the capital return cycle of people's livelihood security projects and basic major projects has been extended, and ultra-long-term financial financing tools can better match the project construction cycle and solidly promote high-quality economic development. Chen Jianheng said. "As for the issuance of special treasury bonds, it is equivalent to using the state's future financial arrangements not to crowd out the fiscal budget of the current year. Xiong Yuan, chief economist of Guosheng, told the Financial Times that this year's deficit rate is planned to be arranged at 3%, and has not broken a hidden constraint of 3%, and from the perspective of the full range of special treasury bonds and special bonds, the actual deficit rate will reach 6 this year6%, 05 percentage points. Therefore, this policy arrangement for the issuance of ultra-long-term special treasury bonds not only takes into account the reasonable scale of China's overall fiscal deficit, but also takes into account the needs of China's medium- and long-term economic development. Chen Jianheng further said that in addition, compared with ordinary treasury bonds, special treasury bonds are usually earmarked, accurate and direct, and can be issued at the right time according to needs, and can be collected and disbursed immediately, which can better optimize the expenditure structure, improve the efficiency of expenditure, and help improve the quality and efficiency of fiscal policy. In addition, the special treasury bonds should be allocated to the local government according to the project demand reported by various localities, and the principal and interest will be repaid, which can replace the local special bonds to a certain extent, promote local economic development and reduce the burden of local investment expenditure, so as to promote stability and help resolve local debt risks. "Released for several years in a row" is in line with the realistic demand
"Issuance for several consecutive years" is an important feature of this round of special treasury bonds, which sets the tone for the continuity and predictability of the proactive fiscal policy in the coming years. In Chen Jianheng's view, the transformation of ultra-long-term special treasury bonds from "emergency" to "normal" should be the result of comprehensive consideration of many aspects. It includes the demand for consolidating the economic rebound in the short term, helping the economic structural transformation in the medium and long term, and preventing and resolving local debt risks, boosting internal and external confidence and expectations, and maintaining the stability of the capital market. Xie Yu, a macro analyst at Caitong, said in an interview with the Financial Times that at present, projects such as the "Three Major Projects" and "Eastern Data and Western Computing" are continuously deployed and implemented, and such projects with a long construction period require supporting long-term funds. In addition, considering the low returns of the corresponding projects of special bonds and urban investment bonds, the shortage of declared projects that meet the income requirements of special bonds, and the continuous pressure on local land finances, the continuous issuance of ultra-long-term special treasury bonds also reflects the long-term trend of increasing leverage. Jin Qianjing believes that the "issuance for several consecutive years" also reflects the flexibility of issuance, that is, the pace and amount of ultra-long-term special treasury bonds may be adjusted according to actual needs, and also leaves enough room for the issuance of special treasury bonds in the future. As stated in the work report, "many aspects now need to increase financial investment", * sector leverage and steady growth has become a consensus expectation, coupled with the implementation of major strategies also require a certain intensity of fiscal expenditure, the overall gap in fiscal funds is large, and there is a need to issue ultra-long-term special treasury bonds in the next few years. The specific issuance plan needs to be further clarified
According to Zheng Shajie, the ultra-long-term special treasury bonds will focus on supporting the construction of scientific and technological innovation, urban-rural integrated development, regional coordinated development, food and energy security, and high-quality population development. The National Development and Reform Commission, in conjunction with relevant parties, is stepping up efforts to formulate and form a specific action plan, which will be launched after being submitted for approval in accordance with the procedures. At present, the industry is also speculating about the specific issuance plan of ultra-long-term special treasury bonds this year. Judging from the pace of issuance, most experts in the industry believe that this year's 1 trillion yuan of ultra-long-term special treasury bonds will most likely be issued in the second half of the year. "This year's work report said that the new special bond quota is 39 trillion yuan, still maintained at a high level, superimposed last year's additional trillion yuan of treasury bonds in 500 billion yuan carried forward to this year, the first half of the policy tools are more sufficient, and at the same time, in order to balance the rhythm of bond supply, this year's ultra-long-term special treasury bond issuance time or relatively late, or in the middle of the year around the start of issuance. In Yuan Haixia's view, this is to avoid a sharp tightening of liquidity caused by the large-scale supply of bonds, and the second is to reserve space for policies in the second half of the year to ensure the smooth operation of the economy throughout the year. As far as the issuance mechanism is concerned, it is expected that the issuance of special treasury bonds may be a combination of directional + public offering, some of which will be issued to relevant domestic banks, and then the central bank will buy out from relevant commercial banks in the form of cash bonds, so as to reduce the pressure on bond supply and the disturbance to the market. Xie Yu said that this issuance may adopt the mode of public rather than directional issuance, for the following three reasons: first, when the ultra-long-term special treasury bonds were issued, China's bond market was not yet mature, and the current capacity of China's bond market has been significantly expanded; Second, non-bank investors such as insurance companies are important market participants in ultra-long bonds, and historically, the directional issuance of special treasury bonds has been more targeted at state-owned banks; Third, the recent rapid decline in the interest rate of 30-year treasury bonds has significantly increased the market demand for ultra-long-term treasury bonds, which is also conducive to public offerings. Referring to the special treasury bond issuance mechanism in recent years, Yuan Haixia believes that the current round of special treasury bonds may still adopt the market-oriented issuance mechanism, and the follow-up or form a normalized issuance mechanism to assess the project capital needs on an annual basis and flexibly launch special treasury bonds. Everybody is watching
Two sessions to take a look! What are the deputies and members talking about?
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Editor: Yu Siqing.
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