CX Daily: Five Things to Know About China’s Unusual Sovereign Bond Issue

Bonds /

Five things to know about China’s unusual sovereign bond issue

The Chinese government took a rare and unexpected decision in October to issue 1 trillion yuan ($141 billion) of additional sovereign bonds in the fourth quarter to finance infrastructure spending, widening the budget deficit as a percentage of GDP for 2023 to a record high of 3.8%.

The announcement, which surprised economists and investors, has fueled debate about whether this heralds a change in the leadership’s approach to fiscal policy.