0
$\begingroup$

The article states that China is selling "special government bonds".

  1. Why do this? Especially when economy is just recovering?

  2. What is the direct effect on the economy, both in the short and long terms?

Improve this question
$\endgroup$
2
$\begingroup$

The article pretty much answers this:

China has issued 100 billion yuan (about 14.1 billion U.S. dollars) of special government bonds for COVID-19 control measures in a bid to support local infrastructure construction and epidemic prevention and control, the senior official added.

It is set to counter the downward pressure on economic growth, expand tax and fee reduction policies to help enterprises tide over hard times, and strengthen budget balance to mitigate the adverse impact of the epidemic on fiscal revenue growth.

Even if the economy is doing better, it is expected to otherwise be below their growth targets.

(If you have a more specific question, you should re-phrase your question accordingly. If you want to find someone with expertise on Chinese government policy making (not me!), I am unsure how many read this website.)

Improve this answer
$\endgroup$
1
  • $\begingroup$ I think you raise a good point on Chinese growth targets - they rely heavily on high GDP growth in order to placate the middle class + continue their push for urbanization. (I think there may also be relationships to Okun's law) $\endgroup$
    – C. Kang
    Sep 17 '20 at 21:25

Not the answer you're looking for? Browse other questions tagged or ask your own question.