China's 2026 debt issuance target is aligning with market expectations, easing concerns among bond traders who are supported by ample liquidity and growing bets on policy easing. The government plans to sell 1.3 trillion yuan ($180 billion) of ultra-long special sovereign bonds this year, according to a copy of its annual work report seen by Bloomberg News.

This stable issuance outlook eased concerns that heavy bond sales might clash with strong equity inflows, improving growth prospects, and rising inflation expectations — all factors that could divert demand away from government debt. The report also said the budget deficit will be maintained at about 4% of GDP this year. This stability is particularly notable given China's economic challenges and the lowest growth target since 1991.

Zhaopeng Xing, senior strategist at Australia & New Zealand Banking Group, noted that the unchanged quota for ultra-long sovereign bonds leaves more policy room for the future. "Bond supply risks should be contained," Xing said, highlighting how the predictable issuance schedule helps maintain market confidence. The steady approach provides breathing room for monetary policy adjustments while supporting the government's broader economic stabilization efforts.