China Says To Sell Initial Batch Of Long-dated Bonds This Week

Beijing, (APP - UrduPoint / Pakistan Point News - 13th May, 2024) China will start selling an initial batch of long-dated bonds this week, the Ministry of Finance announced Monday, as Beijing looks to increase support for the world's second-largest economy.

The central government will begin issuing some 30-year bonds on Friday as part of a planned sale of more than $138 billion of debt, according to a notice posted to the ministry's website.

Other bonds with tenors of 20 years and 50 years will go on sale on May 24 and June 14 respectively.

The Ministry of Finance did not specify the number of bonds that will be issued.

A volatile property market and high unemployment -- particularly among youth -- are key issues dragging down China's economy.

Leaders have set a target of around five percent for this year's growth, a figure seen as ambitious by many economists.

The bond sale had been hinted at in recent months by Beijing, with Premier Li Qiang saying in March that such measures would be used to support major projects of strategic significance.

China has only sold such government bonds on a handful of occasions in the face of major economic headwinds, such as in early 2020 to help fund efforts to counter the pandemic.

Consumer prices in the country have been in positive territory for three straight months, official data showed Saturday, but domestic spending remains relatively weak.

Real estate development once served as a key driver of growth in the country, but mounting debt at several of the sector's biggest firms in recent years has caused activity to stall.

The crisis is being exacerbated by falling home prices and increasing consumer wariness of investing in property.

Authorities have responded by lifting previous restrictions on buying homes in certain areas, including in the major cities of Hangzhou and Xi'an on Thursday, in a bid to spur purchasing.

At China's annual rubber-stamp parliament in March, leaders were upfront about the headwinds facing the economy, pledging to unveil various measures this year to boost growth.

Premier Li said at the time that achieving growth targets this year would "not be easy", given the "lingering risks and hidden dangers" still present in the economy.