SourceRoulettetableBeijing Business Daily
New news came from ultra-long-term special treasury bonds. On May 13, the official website of the Ministry of Finance announced a notice on the arrangements for the issuance of general treasury bonds and ultra-long-term special treasury bonds in 2024, including 20-year, 30-year, 50-year and other categories, of which 30-year products will be launched on May 17.
According to the previous government work report, 1 trillion yuan of ultra-long-term special treasury bonds will be issued this year. Some analysts pointed out that the setting of a variety of maturities for ultra-long-term special treasury bonds can not only stimulate current investment and consumption, but also build a solid foundation for long-term and high-quality development, and at the same time benefit local finance to recuperate. In the follow-up, the people's Bank of China is likely to support it by cutting reserve requirements or medium-term lending facilities (MLF), and it is not ruled out that it may cooperate with the interest rate reduction policy to reduce the financing cost of the real economy.
Release arrangements are announced
The ultra-long-term special treasury bonds include 20 years, 30 years and 50 years, including 20-year, 30-year and 50-year bonds, according to a notice posted on the Ministry of Finance's website. The relevant varieties will be released in mid-November, and the interest will be paid half a year.
According to the circular, in addition to the above-mentioned ultra-long-term special treasury bonds, the Ministry of Finance will also issue multi-term treasury bonds this year, including key-term treasury bonds, savings treasury bonds and other categories. According to the variety and duration of the issue, there are many different ways to pay interest, such as annual interest payment, semi-annual interest payment and one-time principal payment due.
As soon as the issuance arrangement was released, it soon became the focus of the market. The so-called ultra-long-term special treasury bonds usually refer to interest rate bonds with a maturity of more than 10 years, while "special" refers to treasury bonds issued in a special period with a specific target of capital investment and with clear purposes. it often has the characteristics of special fund, flexible use, not included in the fiscal deficit and so on.
It is generally believed that, from historical experience, China has issued five special treasury bonds, including three new issues and two sequels. In terms of issuance period, the shortest of the past five special treasury bonds is 3 years, and the longest is 30 years. Strictly speaking, only the 30-year special treasury bonds issued in 1998 and the 15-year special treasury bonds issued in 2007 can be classified as ultra-long-term special treasury bonds. " Lian Ping, director and chief economist of Guangkai Chief Industrial Research Institute, pointed out.
With regard to this ultra-long-term special treasury bond issue, Lian Ping said that compared with the previous five special treasury bonds, this round of ultra-long-term special treasury bonds has three outstanding characteristics. they are particularly long-term issuance, continuous issuance and a particularly large scale, and a particularly high correlation between the purpose of issuance and economic and high-quality development. It can not only provide abundant ultra-long-term funds for major projects and major projects with long construction cycle and slow return on investment, but also dilute the interest payment pressure on treasury bonds.
Lian Ping believes that this round of ultra-long-term special treasury bonds will focus on the implementation of major national strategies and security capacity-building in key areas, including scientific and technological innovation, integrated urban-rural development, regional coordinated development, food and energy security, and high-quality population development. These areas are closely related to the transformation, upgrading and high-quality development of China's economy in the coming decades, and will play a vital role in achieving the goal of socialist modernization.
Have triple meaning
Earlier, the 2024 government work report proposed that in order to systematically solve the funding problem of some major projects in the process of building a powerful country and national rejuvenation, it is planned to issue ultra-long-term special treasury bonds for several consecutive years starting from this year. Special for the implementation of major national strategies and security capacity building in key areas, 1 trillion yuan will be issued this year.
Zheng Jie, minister of the National Development and Reform Commission, also talked about the issue of ultra-long-term special treasury bonds at an economic press conference during the National two sessions held in March 2024. Zheng Jie said that the issuance and use of ultra-long-term special treasury bonds is a major policy measure, and expanding effective investment is an important task. Ultra-long-term special treasury bonds will be used for "two-fold": specifically for the implementation of major national strategies and security capacity-building in key areas, which can not only stimulate current investment and consumption, but also lay the foundation for long-term high-quality development.
Talking about the impact of the issuance of ultra-long-term special treasury bonds, Lian Ping said that the issuance of ultra-long-term special treasury bonds for several consecutive years from this year is a major strategic measure launched by the central authorities to size up the situation in response to the opportunities and challenges facing China's economic development for a period of time in the future. its significance and impact are very far-reaching. From the perspective of policy effect, the issuance of ultra-long-term special treasury bonds has triple significance, which can not only stimulate current investment and consumption, but also build a solid foundation for long-term and high-quality development, and at the same time benefit local finance to recuperate and recuperate, which will bring benefits in many aspects.
On the other hand, as an important component of the bond market, the issuance of ultra-long-term special treasury bonds will also have an impact on the bond market. Mingming, chief economist of Citic Securities, said that the issuance of special treasury bonds will increase the supply of bonds, while the use of financial funds will also help improve fundamentals and boost market expectations. therefore, in theory, the issuance of special treasury bonds will provide an upward impetus to interest rates.
However, taking into account the relatively slow pace of its issuance and the fact that there is still a shortage of assets in the bond market, we expect the adjustment to be limited and may cause some disturbance to Treasury yields at individual issuance points. With the issuance of special treasury bonds, it will play a key role in the construction of major projects and economic recovery. " Mingming added.
Exempt from interest income tax
At present, the Ministry of Finance has only disclosed the issuance time, maturity and interest payment mode of the ultra-long-term special treasury bonds, but it has not yet disclosed the specific amount, coupon rate and object of each issue. Whether individual investors can participate in the purchase through the counter of bank outlets and other channels has also attracted widespread attention.
In recent years, Chinese residents have a strong demand for investment, especially since 2023, with commercial banks cutting deposit interest rates one after another, national debt products with higher yields guaranteed by the state trust have been favored by investors, and many sales outlets have snapped up the quota of "Nikko". Ultra-long-term special treasury bonds have the advantages of low risk, strong liquidity, exemption from interest income tax, and higher returns compared with medium-and short-term treasury bonds, so they are also regarded as ideal investment products.
However, whether individual consumers can buy this ultra-long-term special treasury bonds also depends on how they are issued. In order to promote the smooth issuance of this round of ultra-long-term special treasury bonds, Lian Ping suggested that consideration should be given to issuing both institutions and individuals, but the issuance targets of specific bond batches can be appropriately focused and distinguished.
In addition, with regard to the use of funds for ultra-long-term special treasury bonds, Wang Jianfan, director of the Budget Department of the Ministry of Finance, pointed out at a press conference held by the State Information Office on April 22 that the pace of issuance will be reasonably arranged, combined with the actual funds of ultra-long-term special treasury bonds, to study the establishment of a regulatory mechanism, and strengthen supervision over the whole process of the allocation, release and use of funds to ensure standardized, safe and efficient use.
In terms of monetary policy support, it is clearly believed that there is a high probability that the people's Bank of China will support it by cutting reserve requirements or MLF operations during the year, and it does not rule out the possibility that it may cooperate with the interest rate cut policy to reduce the financing cost of the real economy. Considering that the supply of local bonds will also accelerate from May, liquidity support may be provided by cutting reserve requirements in the second and third quarters, and after the exchange rate pressure is reduced, it is possible to maintain a low interest rate environment by cutting interest rates, so as to help treasury bonds be issued smoothly at a lower cost.
Beijing Business Daily reporter Liao Meng