China is reportedly planning its first ultra-long central debt sale on Friday.

China is set to kick off the sale of its first batch of ultra-long special sovereign bonds worth 1 trillion yuan ($138 billion) on Friday, in a bid to bolster its economy. The issuance, scheduled from May through November, will include 20-year bonds, 30-year notes, and 50-year tenor bonds, according to sources familiar with the matter.

This move comes as China aims to ramp up fiscal support for its economy, as announced during the National People’s Congress in March. The government’s decision to issue these bonds signals a commitment to increasing fiscal spending amidst mounting debt pressure on local authorities.

The upcoming bond sale, only the fourth of its kind in the past 26 years, follows a similar issuance in 2020 to fund pandemic response measures. The Finance Ministry recently met with underwriters to discuss the arrangement for the bond issuance, indicating the government’s proactive approach to managing its finances.

The sale of special sovereign debt is expected to accelerate fiscal spending, which has been sluggish so far. This, coupled with potential monetary policy adjustments by the People’s Bank of China, could help sustain positive growth momentum and support the country’s growth target of around 5% this year.

However, challenges remain, including weak consumer demand, a lingering property crisis, and uncertainties in the export sector due to escalating tensions with trading partners. Despite these obstacles, China’s proactive measures through bond sales and fiscal stimulus aim to navigate the economy towards a path of sustainable growth.