China plans to significantly boost funding through ultra-long treasury bonds in 2025 to drive business investment and consumer-focused initiatives, a National Development and Reform Commission (NDRC) official announced on Friday. The move is part of Beijing’s intensified fiscal stimulus to rejuvenate its slowing economy.
Special treasury bonds will fund initiatives such as a subsidy program for durable goods. This includes trade-in discounts for old cars or appliances, as well as subsidies for businesses upgrading large-scale equipment. Additionally, households will receive subsidies for purchasing digital products, including smartphones, tablets, smartwatches, and fitness bands, according to Yuan Da, an NDRC official.
In December, the NDRC revealed that all proceeds from the 1 trillion yuan in ultra-long special treasury bonds issued in 2024 had been allocated. About 70% was directed toward “two major” projects, with the rest supporting new initiatives. These major projects involve infrastructure development, such as railways, airports, and farmland, as well as enhancing security capabilities in critical areas, as outlined in official documents.
China’s central bank is also expected to cut interest rates from the current 1.5% “at an appropriate time” in 2025, according to comments reported by the Financial Times. This is part of broader efforts to bolster economic growth.
The world’s second-largest economy has faced challenges in recent years, including a severe property crisis, high local government debt, and weak consumer demand. While exports have been a rare bright spot, they could face increased U.S. tariffs under a potential second Trump administration.
Reuters reported last month that authorities plan to issue a record 3 trillion yuan in special treasury bonds in 2025.
“Overall, we are confident the economy will continue to rebound and improve this year, despite facing new challenges,” Yuan said.
