A few days ago, China's high-level leaders made a major decision to issue ultra-long-term special treasury bonds with a total value of 1 trillion yuan from this year onwards, which is undoubtedly a blockbuster policy with far-reaching impact.
The so-called ultra-long-term treasury bonds refer to bonds with a very long maturity, generally more than 10 years, and even up to 30 or 50 years. The advantage of issuing such long-term bonds is that it can effectively alleviate the pressure of repayment of principal and interest, and exchange time for space.
While"Special"This means that these national bonds will not be included in the fiscal deficit and will not affect the general public budget expenditure, and all the funds raised will be used to support major national strategic areas, such as life sciences, artificial intelligence, medical care, education, etc.
So, why did China issue such a large-scale ultra-long-term special treasury bond? The reason is actually closely related to the current economic situation.
In recent years, China's economic growth has slowed down, domestic demand is insufficient, the external environment is unstable, and the impact of the new crown epidemic has hit many industries and enterprises hard. In response to this dilemma, a series of policies have been introduced, including interest rate cuts, tax cuts, subsidies, and expansion of infrastructure investment, but the effect is limited.
Therefore, the issuance of ultra-long-term special treasury bonds is undoubtedly a more effective, long-term and safe way to provide stable and lasting financial support for key areas, without increasing the fiscal deficit and affecting the operating space of monetary policy.
More importantly, the interest expenses generated by these treasury bonds will be borne by the government, which is equivalent to reducing the debt burden of the local government through the national debt, so that the local government has more funds to develop the economy, support enterprises, and ensure employment.
Judging by the data, by the end of 2023, the **debt balance was 216 trillion yuan, accounting for 17 percent of GDP2%;And the local ** debt is as high as 405 trillion yuan, accounting for 32 percent of GDP2%。At the same time, ** general public budget revenues 93 trillion yuan, much higher than the locality. Therefore, ** is fully capable of bearing the interest expense of ultra-long-term special government bonds.
For the general public, this is good news and an investment opportunity. The state will benefit the people by obtaining more funds to support the economy, enhance its scientific and technological strength, and improve people's livelihood. At the same time, the public can also buy such treasury bonds to obtain stable income, or invest in enterprises in related industries that benefit from treasury bonds to share the development dividends.
However, there are still certain risks associated with investing in ultra-long-term special treasury bonds, and if the future economy is lower than expected or a major event occurs, the yield may rise, resulting in losses to holders. Therefore, when investing, you should make prudent trade-offs, make rational decisions, and reasonably allocate assets according to your own risk appetite.
In general, the issuance of 1 trillion yuan of ultra-long-term special treasury bonds is a major decision, which confirms China's firm confidence in development and strong financial resources, and also brings new investment options to the public, but also a new challenge. We have reason to look forward to the country's development prospects, but we must also maintain a rational attitude and believe that as long as the country and the people work side by side, we will be able to achieve great things.