China Debt Plan Eases Oversupply Fears, Calms Bond Market

China’s 2026 debt issuance target is aligning with market expectations, easing over-supply concerns as demand is supported by ample liquidity and expectations of loose monetary policy.

The government plans to sell 1.3 trillion yuan ($189 billion) of ultra‑long special sovereign bonds this year, broadly in line with market forecasts and the same as what was planned in 2025. The government also announced at the opening of the National People’s Congress Thursday that the headline budget deficit will be maintained at about 4% of gross domestic product this year.