China Plans New Round of Ultra-Long-Term Bond Issuance in 2026
Udumbara
.
The move follows decisions made at the Chinese Communist Party’s (CCP) annual Central Economic Work Conference, which concluded on Dec. 11 and set the policy direction for next year’s economy.
Policy First Announced in 2024
Beijing first unveiled the plan to issue ultra-long-term special treasury bonds in March 2024. In his government work report, CCP Premier Li Qiang said such bonds would be issued over several consecutive years to address funding gaps in major national projects tied to long-term development goals.At the time, Sun Kuo-hsiang, an associate professor of international affairs and business at Taiwan’s Nanhua University, told The Epoch Times the decision signaled weakening fiscal capacity.
“This suggests that projects previously supported through regular government bonds or the general budget can no longer be sustained that way,” he said. “It reflects that China’s economic recovery has not met expectations and is continuing to deteriorate.”
Chinese current affairs analyst Wang He, writing last year in the Chinese edition of The Epoch Times, questioned the effectiveness of the policy. He said that expanding ultra-long-term bond issuance without deeper reforms would do little to resolve China’s underlying economic challenges.
Weak Demand and Overcapacity Persist
Xu Zhen, a capital market specialist with two decades of experience in China’s financial sector, told The Epoch Times that Beijing has rolled out similar stimulus measures almost every year, but with limited results.“Except for a handful of sectors like semiconductors, most industries are facing serious overcapacity,” Xu said. “Under these conditions, it’s highly unlikely that rational small- and medium-sized business owners would choose to expand production.”
Xu added that the broader economic downturn has reshaped consumer behavior, particularly among younger Chinese.
“Consumption is being downgraded, and people’s attitudes toward spending have fundamentally changed,” he said. “After years of pandemic lockdowns, economic decline, and rising unemployment, young people are cutting back out of necessity.”
“Behind this phenomenon is a lack of confidence in the future, in society, and even in the government,” Xu said. “That, fundamentally, is a crisis for the regime.”
