China’s Central Bank Buys $56.3 Billion in Special Government Bonds Amid Debt Crisis

Over the past 20 years, the central bank has avoided buying such bonds in the secondary market, except in 2007 when China’s stock market tumbled.

Paramilitary policemen patrol in front of the People's Bank of China, the central bank of China, in Beijing, on July 8, 2015. Greg Baker/AFP via Getty Images

China’s central bank, the People’s Bank of China (PBOC), said that it purchased 400 billion yuan ($56.3 billion) in special government bonds from primary dealers, a move that economists say reflects the challenges faced by the communist regime, as investors and banks view these bonds as a safer option in a declining economy.

The PBOC said that it purchased the special government bonds from primary dealers in the open market operations on Aug. 29, including 300 billion yuan ($42.3 billion) worth of 10-year term bonds, and 100 billion yuan ($14.1 billion) worth of 15-year term bonds, according to an announcement published on its website.