BEIJING (Reuters) – China will significantly increase financing from long-term Treasuries in 2025 to stimulate business investment and consumer-boosting initiatives, a government planning official said on Friday, as Beijing steps up fiscal stimulus to revitalize the faltering economy.
Special treasury bonds will be used to finance the new initiatives, Yuan Da, an official with the National Development and Reform Commission, said at a press 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 separate program that supports large-scale equipment upgrades for businesses.
Yuan said households will also be eligible for subsidies to purchase three types of digital products this year, including mobile phones, tablet computers, smart watches and bracelets.
In December, the National Development and Reform Commission said Beijing had fully allocated all proceeds from 1 trillion yuan worth of long-term special treasury bonds in 2024, with about 70% of the proceeds funding two “major” projects and the rest going toward new initiatives.
“Major” programs refer to projects such as building railways, airports, farmland and building security capabilities in key areas, according to official documents.
China's central bank is likely to cut interest rates from the current level of 1.5% “at an appropriate time” in 2025, as part of policymakers' efforts to support growth, the Financial Times reported on Friday, citing comments the bank made to the newspaper. .
The second largest economy in the world has suffered over the past few years due to a severe real estate crisis, high local government debt, and weak consumer demand. Exports, one of the few bright spots, may face more US tariffs under a second Trump administration.
Reuters reported last month that authorities had approved the issuance of 3 trillion yuan worth of special treasury bonds in 2025, which would be the highest ever.
“Overall, we are confident that the economy will continue to recover and improve this year” even as it faces new challenges, Yuan said.
