China Reveals 2026 Fiscal Plan with Ultra-Long Bonds

• China to issue ultra-long special government bonds in 2026 to fund national strategies.
• Plan focuses on financial stability and sustainable, long-term growth.

On December 13, 2025, Cryptopolitan reported that China unveiled a fiscal plan centered on the issuance of ultra-long special government bonds in 2026. This initiative aims to fund major national strategies, enhance security, and transition the economy toward sustainable long-term growth.

The announcement followed the annual Central Economic Work Conference, where senior leaders, including President Xi Jinping, outlined the country's economic priorities for the coming year. The fiscal strategy emphasizes investments in infrastructure upgrades and trade-in programs for consumer goods.

A key component of the plan is mitigating financial risks. The finance ministry intends to reduce local government debt and limit the buildup of hidden liabilities. To maintain financial system liquidity, targeted tools such as interest-rate adjustments and reserve-requirement cuts will be employed.

Stabilizing the property market, a critical factor in China's economic outlook, is another priority. Proposed measures include reducing unsold housing inventory, controlling new housing supply, and converting commercial properties into affordable housing units.

China’s fiscal plan signifies a broader policy shift from defensive strategies addressing external pressures, such as U.S. tariffs, to fostering sustainable growth. While China exceeded trade expectations in 2025 with a record goods trade surplus of over $1 trillion, weak domestic demand marked by a collapse in fixed-asset investment late in the year highlighted the need for structural adjustments. In response, the government plans to increase spending on investment projects, with a focus on long-term infrastructure development over consumer subsidies.

The pivot away from large-scale stimulus toward a more targeted fiscal approach underscores China's commitment to achieving economic stability while addressing critical risks in areas like local government debt and the property market.