China issues 1 trillion yuan in government bonds

China has announced the issuance of 1 trillion yuan ($137 billion) worth of government bonds in a move that experts see as an effort to shore up the economy after a slow recovery from the pandemic.

The money will be distributed to local governments to support national disaster prevention and relief, Xinhua reported. The Chinese government will issue the bonds in the fourth quarter of this year.

“All additional treasury bonds will be allocated to local governments through transfer payments, to focus on supporting post-disaster recovery and reconstruction, making up for shortcomings in disaster prevention, mitigation and relief, and improving the country's disaster resilience,” Xinhua said.

Meanwhile, expert Zhang Zhiwei of Pinpoint Asset Management said this move was "very unusual" and "appeared in the market as a surprise."

“I see this policy as another step in the right direction – China should make its fiscal policy more supportive in the face of deflationary pressures in the economy. Some of the money raised will be spent next year, so this should help boost growth prospects beyond the fourth quarter,” Mr. Zhiwei wrote in an analysis.