Trillion-Level Ultra-Long-Term Special Government Bonds Have New Use Cases

[Trillions of Yuan in Ultra-Long Special Government Bonds Have New Uses] Caixin, March 12 — According to this year’s government work report, the government plans to issue 1.3 trillion yuan in ultra-long special government bonds to continue supporting the “dual” construction and “two new” initiatives. Of this, 800 billion yuan will be allocated for the “dual” construction, and 450 billion yuan will support the “two new” initiatives. This means there is an remaining 50 billion yuan in ultra-long special government bonds for other areas. Recently, the Ministry of Finance published the “Notice on Revising the 2026 Government Revenue and Expenditure Classification,” which may indirectly provide an answer: the funds from ultra-long special government bonds can also be used for financial expenditures. According to the “Notice,” the only change in this year’s government revenue and expenditure classification is the addition of a new category under the government fund budget expenditure function classification: “Expenditure Arranged by Ultra-Long Special Government Bonds” (21798 item), reflecting financial expenditures funded by the income from ultra-long special government bonds. So, what specific financial expenditures will be covered by these ultra-long special government bonds this year? According to the “Notice,” there are four main areas: interest subsidies and expense subsidies funded by the income from ultra-long special government bonds; additional capital injections into financial institutions; risk compensation for financial institutions; and other financial expenditures. These financial expenditures are related to efforts this year to expand domestic demand through coordinated fiscal and financial policies. (First Financial)