China Considers Policy Measures to Encourage Private Investment and Consumption
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China’s Ministry of Finance (MOF) has released a package of measures under consideration aimed at supporting private investment and consumption, focusing on micro, small, and medium-sized enterprises (MSMEs) as well as key consumption sectors.
The proposed measures include a special guarantee program for corporate lending with a total scale of RMB 500 billion (approximately USD 71.4 billion). Managed through the National Financing Guarantee Fund over a potential two-year period, the program is intended to cover medium- and long-term loans as well as working capital and operational financing, including factory expansion and retail renovations.
In parallel, the MOF is exploring a loan interest subsidy scheme for MSMEs. Preliminary details indicate that subsidies could apply to newly issued fixed-asset loans and loans provided via government policy-based financial instruments, with an annual interest subsidy of up to 1.5 percentage points. Eligible loans may be capped at RMB 50 million per borrower, with a maximum subsidy of RMB 1.5 million, and the subsidy period may extend up to two years. The focus is expected to be on critical industrial chains, their upstream and downstream sectors, and producer services.
To support consumption, the MOF is also reviewing measures to extend and optimize interest subsidies on service-sector and personal consumption loans through 2026. Proposed updates include expanding the service-sector coverage to digital, green, and retail industries, increasing the maximum eligible loan from RMB 1 million to RMB 10 million, and raising the subsidy cap from RMB 10,000 to RMB 100,000 per borrower. Personal consumption loans could also be broadened to include credit card installment services without sectoral restrictions.
Additionally, the ministry is considering adjustments to the equipment upgrade loan subsidy policy, extending eligibility beyond equipment purchases to include equipment upgrades and newly issued technology innovation loans from 2026.
Officials indicate that these measures are under study and may be adjusted based on implementation experience and broader economic conditions.
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