China's plan to sell 1 trillion yuan ($138 billion) in ultra-long-term treasury bonds marks its latest move to bolster fiscal support for the economy, a step that experts say will stabilize expectations, boost domestic demand and shore up growth.

The issuance of 1 trillion yuan in ultra-long central special sovereign bonds will begin on Friday and run until mid-November. Three tenors are being planned — 20-year, 30-year and 50-year bonds, the Ministry of Finance said on Monday.

"The ultra-long bond issuance marks the introduction of a new policy tool that will be vital for supporting the government's investment in key projects, which will give full play to the crucial role of government investment in shoring up economic growth," said Zhang Liqun, a researcher at the macroeconomic research department of the Development Research Center of the State Council.

The country aims to raise funds for major national strategies and build up security capacity in key areas, especially in fields including technological innovation, coordinated regional development, ensuring grain and energy security, and the high-quality development of the population.

Experts said the issuance and use of the bonds will not only expand effective demand and help achieve the annual growth target this year, but also will be conducive to fostering new quality productive forces and promoting high-quality development in the long run.

As the broader economy is still facing pressures from still-weak domestic demand, Zhang, the researcher, said the issuance and use of ultra-long bonds will accelerate the implementation of key projects and boost related orders, thereby promoting production and investment by businesses, stabilizing employment and stimulating consumer spending.

Zhang said the funds that are raised will be used to support key projects and fields, including urban underground pipe network projects, upgrades of the education and healthcare systems, and boosting China's strengths in transportation, providing a solid foundation for China's long-term and high-quality growth.

Luo Zhiheng, chief economist at Yuekai Securities, said the ultralong bond issuance will help expand demand, consolidate the foundation for economic recovery and optimize the economic structure.

He also said the move will help optimize the debt structure of the central and local governments.

Hong Hao, chief economist at GROW Investment Group, said the ultra-long treasury bond issuance, together with the special government bond to be issued by November, represents an expansion in fiscal deficit.

Together, these bonds represent over 1 percent of GDP and are a powerful fiscal expansion that the market is looking for. In a low-rate environment and with low leverage on the central government's balance sheet, it pays to borrow to boost fiscal expansion, Hong said.

Regarding China's plan to issue ultra-long, special-purpose treasury bonds for several consecutive years, Liu Sushe, deputy head of the National Development and Reform Commission, said the country has drafted an action plan to support its key strategies and enhance its capacities to ensure security in key areas.

Liu told a news conference in April that the focus will be on achieving greater self-reliance and strength in science and technology, promoting integrated urban and rural development, and enhancing the capabilities of ensuring grain and energy security.

Zhao Xijun, co-director of the China Capital Market Research Institute at Renmin University of China, said that issuing ultra-long-term special treasury bonds to support strategically important innovation projects can be an innovative way to leverage fiscal policy to build China's scientific strength.

Louise Loo, lead economist at British think tank Oxford Economics, noted that authorities are pledging the upcoming bond proceeds for the building up of "security capacity" in strategic projects in the areas of science and technology innovation and socioeconomic development.

On the monetary policy front, Loo said the People's Bank of China, the nation's central bank, is likely to facilitate the increased bond pipeline by keeping liquidity conditions loose and increasing its role in secondary Chinese government bond trading.