China to issue 300 billion yuan special treasury bonds

China's Ministry of Finance will issue 300 billion yuan ($41.7 billion) in special treasury bonds to support eight state-owned financial institutions in replenishing their core Tier 1 capital, according to a statement by the ministry on Monday.

The eight institutions include the Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China (ABC), Export-Import Bank of China, China Export & Credit Insurance Corporation, People's Insurance Company of China (PICC), China Life Insurance Company, China Taiping Insurance Group and China Reinsurance Corporation.

Several following announcements on the Shanghai Stock Exchange showed that ICBC plans to raise up to 100 billion yuan and ABC up to 160 billion yuan through A-share issuances to designated investors, with investments from the Ministry of Finance, China National Tobacco Corporation and its relevant subsidiaries. The eight institutions plan to raise a combined 360 billion yuan. 

The Ministry of Finance will also inject 30 billion yuan into the Export-Import Bank of China and 10 billion yuan into China Export & Credit Insurance Corporation.

The Ministry of Finance said the capital injections will help strengthen the institutions' capacity for sound operations and risk management, while enhancing their ability to serve the real economy. The move is also expected to support their high-quality development and provide stronger financial backing for stable and healthy economic growth.

A broader re-capitalization effort

The latest move follows a similar round of capital replenishment last year.

In 2025, the Ministry of Finance issued 500 billion yuan in special treasury bonds to support four major state-owned commercial banks — Bank of China, China Construction Bank, Bank of Communications and Postal Savings Bank of China — in replenishing their core tier-one capital.

Compared with last year, the latest round covers a broader range of institutions, extending beyond major commercial banks to include policy-oriented financial institutions and state-owned insurers.

Analysts see the move as a forward-looking effort to strengthen the capital base of major financial institutions and ensure they have sufficient capacity to support economic activity.

"Technological innovation, industrial upgrading and the expansion of domestic demand are generating strong financing needs, requiring financial institutions to maintain stable support," said Yu Xiang, the chief policy analyst at CITIC Securities, in an interview with Xinhua.

He noted that the inclusion of policy-oriented financial institutions reflects the distinct roles played by different types of financial institutions. With stronger capital bases, these institutions can better perform their countercyclical functions and provide more stable medium- and long-term financing for major projects and industrial transformation, he said.

Further enhance capital strength

For policy-oriented financial institutions, the focus is closely linked to their role in supporting national strategies and economic development.

The Export-Import Bank of China said the capital injection will significantly enhance its capacity to provide funding for the real economy and support China's opening-up, while strengthening its resilience in risk management.

China Export & Credit Insurance Corporation said the additional capital will help expand the coverage of export credit insurance and enable it to better fulfill its policy-oriented role in supporting the real economy.

A representative of China Life said the re-capitalization will further strengthen the company's underwriting capacity and risk resilience, allowing it to provide greater insurance and financial support for the high-quality development of the real economy.

According to estimates by China International Capital Corporation, the 300 billion yuan in new capital could potentially support about 4 trillion yuan in asset expansion once the re-capitalization is completed. This could enhance the institutions' capacity for direct credit expansion and external mergers and acquisitions, while providing additional support for the real economy and financial risk prevention.