Published March 21, 2024
- Beijing’s new off-budget treasury bonds will span decades, and they have been sold only 3 times before – in some of the most challenging economic times
- Analysts break down the potential risks and rewards of these rare offerings, and why raising long-term debt could help local governments curb crippling debt piles
China will issue 1 trillion yuan (US$139 billion) worth of “ultra-long-term special government bonds” this year, Premier Li Qiang said on March 5 while delivering his maiden work report at Beijing’s annual parliamentary meeting, where leadership revealed the nation’s economic growth target of “around 5 per cent” for 2024.
Li also said the issuance of such ultra-long-term treasury bonds may continue for the next few years, raising expectations that the central government is stepping up its fiscal spending amid mounting debt pressure on many local governments.
What are Beijing’s special new ultra-long bonds?
The Ministry of Finance has yet to reveal exactly how long these bonds will take to mature, and it hasn’t said when or how they will be sold. It’s also unclear whether the funds, or how much, might be transferred directly to local governments. And a big question mark hangs over how the proceeds will be managed.
Analysts speculate that “ultra-long-term” could refer to durations of 30 to 50 years. And the “special” nature of the bonds means that the funds may be designated for some very specific purposes and/or used in a one-off manner.
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SOURCE: www.scmp.com
RELATED: Russian media: Several Chinese banks stop accepting yuan payments from Russia
A Chinese citizen is counting Chinese yuan in Fuyang, Anhui province, China, on February 20, 2024. (Costfoto/NurPhoto via Getty Images)
Published March 21, 2024
Several Chinese banks have stopped accepting payments from Russia in Chinese yuan, fearing ramifications of U.S. sanctions, the Russian state-controlled outlet Izvestia reported on March 21, citing representatives of the Russian baking sector and business.
These institutions include Ping An Bank, Bank of Ningbo, China Guangfa Bank, Kunshan Rural Commercial Bank, Great Wall West China Bank, Shenzhen Rural Commercial Bank, Dongguan Rural Commercial Bank, and China Zheshang Bank, said Alexey Poroshin, the director of the Pervaya Gruppa firm, in a comment for Izvestia.
While the reported issues with yuan payments began in mid-January, complications with financial transactions between Russia and China started last December amid tightening Western sanctions.
Chinese banks first reportedly began rejecting payments in U.S. dollars, which could be easily tracked by American authorities. Last month, China’s Chouzhou Commercial Bank ended operations in Russia and Belarus, while three other major Chinese banks stopped accepting any payments from sanctioned Russian institutions.
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SOURCE: www.kyivindependent.com
RELATED: Kremlin Slams Western ‘Pressure’ on Chinese Banks Over Russian Payments
Published March 21, 2024
The Kremlin on Thursday slammed the West for putting “unprecedented pressure” on Chinese banks accepting payments from Russia, admitting there were some “problems” with cross-border transactions.
Citing Russian financial sources, the pro-Kremlin Izvestia newspaper reported earlier on Thursday that some Chinese lenders had stopped accepting payments in Chinese yuan from Russian companies.
“The unprecedented U.S. and EU pressure on China continues… this creates certain problems,” Kremlin spokesman Dmitry Peskov told journalists when asked about the reports.
Officials in Washington and Brussels are targeting companies and banks in third countries they say are helping Russia avoid Western sanctions by trading and executing payments.
