China’s Special Treasury Bonds and Corporate Financing Accelerator Spur Investment Activity

In January 2026, Chinese authorities issued about 93.6 billion yuan (approximately $13.4 billion) of ultra-long-term special treasury bonds targeted at supporting key equipment upgrades across sectors like industry, energy, education, healthcare, and residential infrastructure. This issuance is part of a larger funding program expected to channel over 460 billion yuan into priority investment areas in 2026. The move reflects Beijing’s intent to stimulate demand and modernize critical sectors through direct fiscal support, especially as private sector investment growth has slowed.

This fiscal initiative dovetails with a broader environment of corporate financing activity in China’s technology and innovation landscape. One notable example is Shanghai-based AI startup Jieyue Xingchen, which completed a blockbuster Series B+ financing round exceeding 5 billion yuan, marking a new high for funding rounds in China’s large-model AI segment. Prominent investors including Shanghai Guotou Leading Fund, China Life Equity, and Tencent participated, underscoring sustained investor enthusiasm for AI and advanced computing capabilities despite wider macroeconomic headwinds. The company also appointed a new chairman with deep industry experience, positioning itself for accelerated growth.

While domestic capital markets show signs of dynamism, China’s broader investment climate is contending with mixed external signals. Foreign direct investment into China fell by nearly 10% in 2025, highlighting structural challenges in attracting new inbound capital. However, this decline has been partially offset by targeted investments from certain bilateral partners and geographically diverse capital sources, which reflect evolving investor strategies in the region.

Corporate financing within China is also benefiting from expanded policy support for cross-border capital management. The nationwide rollout of integrated domestic and foreign currency capital pools for multinational companies enables eligible corporations to manage both renminbi and foreign currency funds more efficiently. This policy is designed to facilitate smoother global operations for multinationals and encourage the use of the yuan in international finance, fostering deeper financial opening-up and corporate flexibility.

Together, these fiscal and private sector investment developments illustrate a multifaceted effort by Beijing to stimulate investment activity, support strategic industries like AI, and manage capital flows in a period of tightening global competition and shifting investor preferences. China’s approach combines significant state support with robust private financing to reinforce confidence and fuel growth in key future-oriented sectors.