China to issue US$14b special pandemic bonds
Print Edition
China will issue 100 billion yuan (US$14.1 billion) in special government bonds in a bid to help finance recovery from the coronavirus pandemic, the Ministry of Finance said yesterday.
The ministry will issue two batches of fixed-rate special bonds, namely 50 billion yuan of five-year bonds and 50 billion yuan of seven-year bonds, both of which will be listed and traded on June 23, it said in a statement.
China will pursue a more proactive fiscal policy, setting its fiscal deficit above 3.6 percent of GDP and issuing 1 trillion yuan of special epidemic bonds this year.
China’s plans are being closely monitored by market participants, as when and how the special bonds are sold will affect market liquidity.
Earlier yesterday, sources said that the bond sales will be completed by the end of July.
According to the sources, 70 percent of the special treasury bonds will have a 10-year term, 20 percent will have a maturity of five years and the remainder will be seven-year bonds.
China’s economy shrank 6.8 percent in the first quarter from a year earlier, the first contraction in decades.
Meanwhile, 10 banks in Shanghai will jointly provide special credit support for firms in the Pudong New Area to bolster local economic momentum, officials said at a financial conference yesterday.
Banks, including Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, Bank of China, Bank of Communications, Shanghai Pudong Development Bank and Bank of Shanghai, signed loan credit agreements with 100 corporate representatives during the conference.
Special credit lines worth 160 billion yuan will be provided for more than 10,000 small and medium-sized enterprises, which will mainly focus on basic living needs, employment stability and the new online economy.
Pudong’s Financial Bureau has also sealed a cooperative agreement with key banks to guide enterprises with financial difficulties through the current period of crisis.
A comprehensive platform was also launched during the conference to provide the latest financial policies and online credit services for firms.
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