Special treasury bond issuance to decline in 2026
Special treasury bonds (STBs) will play a smaller role in juicing economic growth this year.
Per the Government Work Report, released March 5, the central government will issue RMB 1.6 trillion worth of STBs in 2026, RMB 200 billion less than last year.
The decline is driven by a drop in funding for bank recapitalization.
- Only RMB 300 billion of STBs have been earmarked to replenish banks’ core tier 1 capital, down from RMB 500 billion in 2025.
Some context: Last year, the funds were used to replenish the capital of Bank of China, Bank of Communications, Postal Savings Bank of China, and China Construction Bank.
- We expect this year’s funds to recapitalize Industrial and Commercial Bank of China and Agricultural Bank of China.
Beyond bank recapitalization, Beijing will issue:
- RMB 250 billion to fund its trade-in program for big-ticket consumer goods, down from RMB 300 billion in 2025
- RMB 200 billion to fund its industrial upgrading program, the same as last year
- RMB 800 billion to fund public works, the same as last year
- An additional RMB 50 billion which hasn't been earmarked for a specific purpose
Get smart: The smaller STB program suggests Beijing is wary of ramping up explicit central government borrowing.
- Instead, policymakers are leaning more heavily on quasi-fiscal channels – such as policy bank financing – to sustain infrastructure spending.
Get smarter: If growth momentum falters later this year, STB issuance remains one of the easiest levers for Beijing to scale up stimulus quickly.
- That means the smaller program should be seen as a baseline – not a hard cap on central government support.