Ju Jiandong, Unigroup chair professor at the PBC School of Finance (PBCSF) at Tsinghua University

The issuance of more yuan-denominated government bonds to overseas investors could help address China's domestic imbalances, speed up the internationalization of the Chinese yuan, and provide safe assets for the world, according to Ju Jiandong, Unigroup chair professor at the PBC School of Finance (PBCSF) at Tsinghua University. 

Ju made the remarks at the 2026 Tsinghua PBCSF Chief Economists Forum themed "China and the Global Economy in 2026: Review and Outlook — Global Rebalancing and Re-Architecturing of the International Monetary System."

The proceeds from the issuance of yuan-denominated government bonds could be used to raise the average monthly pension of urban and rural residents, swap for newly incurred local government debt, and increase central government investment, according to Ju. 

This will increase urban and rural residents' income and boost consumption demand, local investment demand, as well as the central government's investment demand, particularly in strategic industries such as artificial intelligence and new energy, Ju said. 

"The new demand generated in these three areas will substantially raise aggregate domestic demand and achieve a rebalancing of the macroeconomic supply-demand structure," the economist said. 

Data from the National Bureau of Statistics show that final consumption expenditure accounted for 56.9 percent of China's GDP in 2025. Still, as highlighted by the Central Economic Work Conference, China continues to face a complex landscape where external pressures are intensifying and domestic imbalances, particularly the friction between robust supply and lackluster demand, remain pronounced, according to Xinhua.

The Central Economic Work Conference held in December also greater attention should be given to addressing local fiscal difficulties. Specifically, efforts should be made to steadily defuse local government debt risks in an orderly manner, according to the meeting.

Meanwhile, the issuance of yuan-denominated government bonds could also benefit the rest of the world, given the current international economic landscape, according to Ju. 

He noted that at present, the global supply of safe assets ($40 trillion of US Treasuries) has almost reached the ceiling of US Treasury issuance. "The internationalization of yuan government bonds comes at exactly the right time," Ju said, adding that such an issuance can also accelerate the internationalization of the yuan and provide safe assets for the world.

"It is rare to find a single policy that can simultaneously accommodate the interests of China and the rest of the world, of urban and rural areas, and of central and local governments — and the internationalization of yuan government bonds is precisely such a policy initiative, one that takes all parties' interests into account and approximates a Pareto improvement," the economist said.

China's central government has also stepped up issuance of yuan bonds. In August, five-year yuan treasury bond futures debuted at the Hong Kong bourse, marking the first yuan treasury bond futures contract traded in the offshore market, according to Xinhua.

This is an important step in supporting the long-term development of the offshore RMB bond market and the broader process of the internationalization of the Chinese yuan, Paul Chan, financial secretary of the Hong Kong Special Administrative Region government, said at the time, according to Xinhua. 

By then, global investors held 3.2 trillion yuan ($474 billion) of onshore Chinese bonds, Xinhua reported.

Global Times