(Yicai) Oct. 16 -- China has completed the sale of CNY1.3 trillion (USD194.4 billion) in ultra-long special treasury bonds for this year, with the final CNY20 billion (USD2.99 billion) tranche issued this morning. The proceeds are destined for long-term national projects, equipment upgrades, consumer goods trade-in subsidies, and broader efforts to spur domestic demand.

Unlike ordinary sovereign debt, ultra-long special treasury bonds are issued periodically to finance specific policy objectives, typically with maturities of 10 years or more. The finance ministry has issued them for three straight years since 2024 as part of efforts to address insufficient domestic demand, expand effective investment, and boost consumption. Sales totaled CNY1 trillion in 2024 and CNY1.3 trillion last year and in 2026.

Of this year’s proceeds, CNY800 billion (USD119.6 billion) has been allocated to implementing major national strategies and strengthening security capacity in key areas. CNY250 billion was earmarked for the government’s consumer goods trade-in program, CNY200 billion for large-scale equipment upgrades, and CNY50 billion for a policy package combining fiscal and financial measures to boost domestic demand.

The CNY800 billion is being used to support 1,417 major projects, including scientific and technological innovation, ecological protection and restoration in the Yangtze River Basin, urban underground pipe networks, major water conservancy projects, the New Western Land-Sea Corridor, and improving the quality of higher education. The CNY200 billion for equipment upgrades has helped more than 11,000 projects across 22 sectors.

The CNY250 billion for trade-ins has been fully distributed to local governments, according to the finance ministry. From January to August, sales of goods covered by the program reached CNY1.55 trillion, benefiting 208 million people. The goods traded in for new ones included 5.35 million vehicles and 91.46 million home appliances.

With this year’s issuance of ultra-long special treasury bonds now complete, some local government bond sales are still pending. Based on official data the amount is about CNY1.45 trillion.

Editor: Tom Litting