BEIJING (Reuters) – China will sharply increase ultra-long-term government bond financing in 2025 to boost business investment and consumer stimulus initiatives, a state planning official said on Friday, as Beijing ramps up fiscal stimulus to revitalize its ailing economy.
The special government bonds will be used to finance new initiatives, Yuan Da, an official at the National Development and Reform Commission (NDRC), said at a news conference.
These new initiatives include a durable goods subsidy program, where consumers can trade in old cars or appliances and buy new ones at a discount, and a special program that subsidizes large-scale equipment upgrades for businesses.
Households will also be eligible for subsidies this year to buy three types of digital products, including cellphones, tablet computers, smart watches and wristbands, Yuan said.
In December, the NDRC said Beijing had fully deployed all proceeds from 1 trillion yuan in ultra-long special government bonds in 2024, with about 70% of the proceeds to finance “two big” projects and the rest going to new initiatives.
According to official documents, the “major” programs refer to projects such as the construction of railways, airports and agricultural land, as well as the construction of security capacities in key areas.
China’s central bank is likely to cut interest rates from its current level of 1.5% “at an appropriate time” in 2025, the Financial Times reported on Friday, citing comments the bank made to the newspaper, as part of policymakers’ efforts to support growth.
The world’s second-largest economy has struggled in recent years due to a severe housing crisis, high local government debt and weak consumer demand. Exports, one of the few bright spots, could face higher US tariffs under a second Trump administration.
Reuters reported last month that the authorities had agreed to issue 3 trillion yuan worth of special government bonds in 2025, which would be the most in history.
“Overall, we are confident that the economy will continue to recover and improve this year,” even as it faces new challenges, Yuan said.
