TMTPost -- The Chinese government is kicking off issuance of muti-billion-dollars’ special sovereign bonds this week, ramping up fiscal boost of the world’s second largest economy.

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China will issue RMB1 trillion (US$138 billion) of ultra-long special treasury bonds starting Friday to raise funds for the implementation of major national strategies and build up security capacity in key areas, the Ministry of Finance (MoF) said Monday.

Issuance of the first batch of  such bonds with terms of 20 years, 30 years and 50 years will begin on May 24, May 17 and June 14, respectively, and complete by mid-November, namely auction of the final batch of 30-year notes on November 15, according to the schedule released on the website of MoF on Monday.

In his Government Work Report delivered in March, Chinese Premier Li Qiang unveiled China will issue ultra-long special treasury bonds over each of the next several years for the purpose of implementing major national strategies and building up security capacity in key areas, starting with 1 trillion yuan of such bonds this year.

The premier stressed on Monday that significance in issuing ultra-long-term special-purpose government bonds to effectively support major strategies and the development of security capabilities in key areas, which will provide strong support for promoting Chinese-style modernization.

The ultra long-term special government bonds will help shore up the investment and consumption at the moment and lay the foundation for long-term high-quality development, Zheng Shanjie, head of the National Development and Reform Commission (NDRC), told a press conference held on the sidelines of China's national legislature in March.  The bonds will be mainly used to support areas such as scientific and technological innovation, integrated urban-rural development, coordinated regional development, food and energy security, and high-quality development of the population, according to Zheng.

The issuance comes earlier than expected, underscoring the central government's resolve to support the economy, the Global Times reported, citing analysts on Monday, noting that such early issuance will help stabilize market expectations and bolster market confidence.The pace of the bond issuance is faster than expected, while the time span is longer than expected too. Since the bonds are ultra-long-term, the central government will only need to pay interests over a relatively long period, while the time to repay the principal will be greatly delayed, which will help improve the country's fiscal sustainability, commented Xi Junyang, a professor at the Shanghai University of Finance and Economics.

Sales of the special government bonds are likely to fund government spending on infrastructure, a key part of fiscal stimulus for China to achieve the economic growth target.  The boost to gross domestic product (GDP) could be as much as 1 percentage point, said Xing Zhaopeng at Australia & New Zealand Banking Group.

Chinese Premier Li also announced in the same government work report that China has set the economic growth target at around 5%, the same as the growth target of 2023. Many economists and analysts, including EastMoney’s Chief Macroeconomic Analyst Wang Qing, believe the target is in line with market expectations.

It is expected that resident consumption will continue to recover in 2024, while macroeconomic policies are expected to shore up stable growth. Therefore, the actual economic growth is expected to reach around 5% this year, said Wang.The focus of macro policies this year is to drive the construction of a modern industrial system with technological innovation, promote the development of the private sector, and further enhance the inherent engine for economic growth. Wang added.