China Announces 1 Trillion RMB Special Ultra-long Debt

March 5, 2024

China Announces 1 Trillion RMB Special Ultra-long Debt

On March 5, Chinese Premier Li Qiang announced a 1 trillion RMB worth of special ultra-long government bonds. The issue of the ultra-long bonds will continue for the next several consecutive years, specifically allocated for “national strategic initiatives” and the “development of key areas concerning national security”. Issuance of the year 2024 was included in the annual government work report to the National People’s Congress delivered by the Premier.

It’s the fourth time that China issued a special national debt since the first release in 1998. The most recent issue of special bonds was in 2020 with one trillion RMB worth, specifically allocated for nationwide COVID-19 prevention and control. “Special” is defined as debts allocated for specific purposes or programs, usually on a national strategic level, and is excluded from the deficit. With consideration of the recent international situation, policymakers in China have stressed multiple times on prioritizing national security, aligning with the announcement of this issuance. “Prepare to undergo the major tests of high winds and waves, and even perilous, stormy seas”, said President Xi during the 20th CPC National Congress in 2022. “Ultra-long” refers to the bond issuance periods exceeding 10 years. In 1998, China issued a series of long bonds as stimulus for infrastructure, in response to the 1997 Asian financial crisis.

Besides the special debt, the government work report also released the fiscal plan for the year, including a 3% deficit rate equal to that of 2023, and a special bond of 3.9 trillion RMB for local government debts. The report emphasized the necessity of “optimizing expenditure structure” which will strengthen financial support for national strategic programs and basic livelihoods. In exchange, the annual fiscal plan will restrict “general expenditure” that occupies the majority of local government debts.


National Representative Proposes Increase in Paid Days Off by Legislation

Kenneth Fok Kai-kong, a Hong Kong representative of the National People’s Congress, proposed an increase in paid days off in China’s labor system on March 5. With heavy workloads and insufficient guarantee for labor regulations, a portion of laborers in China have “no vacation, cannot take a vacation, or dare not take a vacation,” Fok summarized. He proposed amendments to the current paid days off system, recommending additional off days added each subsequent year to employees, up to a maximum of ten days from five days initially. Fok also stressed the priority of mandatory implementation of such policies according to laws, including penalizing enterprises violating related regulations and laws.

In China, labor regulations and laws only set a minimum of five days off currently. Plus, the regular two-day weekend off is not mandatorily implemented in many enterprises in China. With improvements in living standards aligning with economic growth, the vacation system has become insufficient for employees, specifically for the younger generations. The tourism industry in China has been also affected by the vacation system. Visitors concentrated on the seven-day Labor Day vacations and National Day vacations, Fok pointed out in his proposal. To stimulate the domestic economy, it’s necessary to expand tourism opportunities by increasing the number of paid days off, thus releasing the consumption potential of the masses.


Committee Member Suggests Extending Paid Maternity Leave to Two Years

In a recent interview with Henan Daily on March 4th, National Committee of the Chinese People’s Political Consultative Conference (CPPCC) member and Sichuan University Huaxi Hospital’s Gan Huatian suggested that in order to build a childbirth-friendly society and reduce the cost of child-rearing, it is advisable to extend paid maternity leave for women to two years, until the child is old enough to attend kindergarten. This extension would not only potentially increase the willingness to give birth but also contribute to the growth and development of infants and toddlers.

Gan also highlighted the need to consider the labor costs faced by enterprises and institutions during extended maternity leave, in order to avoid reluctance to hire female employees, thereby reducing gender discrimination in the job market. Previously, Gan Huatian had proposed extending paternity leave for men. He asserts that raising children should be the responsibility of both parents and that placing the burden solely on women is unfair.

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