Core Viewpoint - The relationship between fiscal policy and financial markets is crucial for the internationalization of the Renminbi, with government bonds playing a key role in providing risk-free assets and pricing benchmarks in the capital market [2][10][12]. Group 1: Fiscal and Financial Relationship - The current Chinese securities market faces significant issues, particularly the weak liquidity of government bonds, which are primarily held by banks and not actively traded [2]. - The perception that government bonds are merely a tool for fiscal deficit financing is a misunderstanding; they are essential for the internationalization of the Renminbi [2][10]. - Fiscal policy and financial markets are interconnected, and viewing them as separate entities leads to misconceptions about their relationship [3][8]. Group 2: Role of Government Bonds - Government bonds serve multiple functions, including providing a basis for monetary supply and acting as a tool for central bank operations [10][11]. - The issuance of government bonds is not only for financing needs but also to meet the demand for new monetary supply and to provide risk-free assets for the financial market [10][12]. - Expanding the issuance of government bonds is necessary for enhancing the internationalization of the Renminbi, as it increases global demand for Renminbi assets [12][14]. Group 3: Economic and Financialization - The financial attributes of fiscal policy are becoming increasingly prominent, reflecting its impact on financial markets and the economy [8][9]. - As national wealth accumulates, the importance of financialization grows, necessitating a new understanding of how fiscal policy interacts with financial markets [9][10]. - The ability to effectively utilize and allocate accumulated wealth is critical for economic growth, highlighting the need for improved financial resource allocation [9][10].