Understanding in 1 Minute: What Does Long-Term Special Treasury Bonds Mean?#
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This article is from WeChat official account: Sanzhe Life (ID: Ezhers), author: Sanzhe Life, cover image from: Visual China
The government work report mentioned that in the future, long-term special treasury bonds will be issued for several consecutive years, and 1 trillion yuan will be issued this year!
Don't worry, let's talk about it briefly today.
Treasury bonds, also known as national bonds, are debt certificates issued by the government to the public based on its credit.
And long-term generally means that the issuance period will be more than 10 years.
The so-called special treasury bonds are issued for special reasons, and the funds raised are used for special purposes or to support specific projects.
The government work report said that issuing long-term special treasury bonds is specifically used for the implementation of major national strategies and the construction of key areas of security capabilities, and to solve the funding problems of major projects.
In fact, we also issued trillions of treasury bonds in the fourth quarter of last year, as "special treasury bonds" management.
Let's review the situation at that time.
In recent years, many places in China have experienced extreme natural disasters such as heavy rain, floods, and typhoons, and the task of post-disaster recovery and reconstruction in local areas is relatively heavy.
Therefore, in the fourth quarter of 2023, an additional 1 trillion "special" treasury bonds were issued, mainly to support post-disaster recovery and enhance disaster prevention and relief capabilities.
But some friends may ask, with the reduction of reserve requirements and interest rates by banks, there is already money in the market, why do we still need to issue "special" treasury bonds?
This is because, although China's macroeconomic situation is generally recovering, the problem of insufficient total demand still exists.
If the money is just circulating in the banks and not transmitted to the real economy, it will definitely not work!
Therefore, in the case of limited effectiveness of monetary policy, fiscal policy needs to take action.
Issuing "special" treasury bonds is equivalent to the central government borrowing money from banks and other institutions.
At that time, the situation was that disaster relief and economic stability required efforts from local governments, but local governments were affected by local debt pressures.
Therefore, the "special" treasury bonds issued in the fourth quarter of 2023 were all arranged for local governments through transfer payments.
This money is used for disaster relief and is all given to the local governments without repayment.
Through transfer payments, it can reduce the burden of local government debt, increase investment capacity, and achieve the goal of expanding demand and stabilizing growth.
In this government work report, it is pointed out that issuing long-term special treasury bonds is to systematically solve the funding problems of some major projects in the process of building a strong country and national rejuvenation.
Well, that's all for today.
This article is from WeChat official account: Sanzhe Life (ID: Ezhers), author: Sanzhe Life