Ministry Of Finance And Other Departments Introduce Comprehensive Fiscal And Financial Policies To Boost Domestic Demand

On January 20, the Ministry of Finance and relevant departments announced a package of six measures that include implementing interest subsidies for loans to small and micro enterprises, launching a special guarantee program for private investment, and optimizing fiscal interest‑subsidy policies for equipment renewal loans, service‑sector operating loans, and personal consumption loans. Four of the measures are targeted at supporting private investment, while two are designed to stimulate consumption.

Vice Minister of Finance Liao Min explained at a State Council Information Office press briefing that the first quarter is typically a period of relatively high credit issuance, and it is therefore important to align these policy measures with bank lending activity so that their effects can be realized earlier.

To bolster consumption, the authorities clarified enhancements to the loan interest‑subsidy schemes for service‑sector operators and for personal consumption loans. Both policies will be extended through the end of 2026 and the roster of participating institutions will be expanded. The service‑sector subsidy will add digital, green and retail as priority areas, raise the per‑enterprise eligible loan amount from RMB 1 million to RMB 10 million, and increase the maximum subsidy per enterprise to RMB 100,000. The personal consumption loan subsidy will now cover credit‑card bill installment services and will remove previous restrictions on supported consumption categories.

Liao Min noted that raising the single‑enterprise loan ceiling to RMB 10 million, with a one‑year subsidy at one percentage point and a maximum subsidy of RMB 100,000 per enterprise, will materially benefit service‑sector operators. The scope of supported consumption categories has been expanded to 11 types, and the number of participating institutions has been increased to include all city commercial banks, provincial rural commercial banks, rural commercial banks in provincial capitals and foreign banks with regulatory ratings of 3A or above—about 90 institutions in total—thereby strengthening the financial system’s role in serving service‑sector businesses.

In response to calls to include credit‑card lending, the personal consumption subsidy has been adjusted so that any personal consumption loan used for consumption qualifies for a one‑percentage‑point subsidy, and credit‑card bill installment products are explicitly incorporated into the subsidy framework.

The optimization of the equipment renewal loan subsidy expands support from equipment purchase loans to fixed‑asset loans related to equipment renewal projects, and includes technology‑innovation loans newly issued from 2026 that are supported by re‑lending policies. The revisions also broaden the range of supported sectors, add participating banks and streamline subsidy procedures.

Regarding interest subsidies for small and micro enterprise loans, the policy clarifies that, from January 1, 2026, qualifying fixed‑asset loans issued by participating banks to eligible small and micro private enterprises, as well as funds from new policy‑based financial instruments used in projects, will be covered. Supported areas include key industrial chains and their upstream and downstream sectors, and productive service industries.

Liao Min described this measure as a new policy to support the development of small and micro private enterprises. The subsidy will apply to loans within 14 priority industrial chains—such as new‑energy vehicles, industrial robots, medical equipment and mobile communications devices—as well as to productive service sectors including technology, logistics, information and software, and to agriculture, forestry, animal husbandry and fisheries. The subsidy rate is set at 1.5 percentage points of the loan amount, with a maximum subsidy period of two years, and the per‑enterprise eligible loan cap is RMB 50 million.

In addition, the Ministry of Finance and three other departments confirmed the establishment of a special guarantee program through the National Financing Guarantee Fund with a total scale of RMB 500 billion to be implemented over two years. The program will provide guarantees for private‑investment loans to qualifying small and micro enterprises, supporting medium‑ and long‑term loans for scenario expansion and upgrades as well as loans for factory expansion, store refurbishment and working‑capital needs. Policy enhancements will be applied to risk‑sharing ratios, compensation limits, guarantee amounts and guarantee fees.

Liao Min emphasized that the traditional remit of government financing guarantees has focused on small and agricultural enterprises, whereas the new private‑investment special guarantee program expands support to include medium‑sized enterprises and raises the single‑enterprise credit line for eligible small and micro enterprises to RMB 20 million, accompanied by higher compensation limits and adjusted risk‑sharing arrangements.

The fiscal costs associated with these enterprise‑ and consumer‑oriented measures have been fully budgeted for 2026. Local governments and participating institutions are encouraged to actively implement the measures, with greater engagement yielding greater benefits, and enterprises and households may access additional credit in line with their production and consumption needs. The Ministry of Finance will continue to coordinate with relevant departments, innovate macro‑control measures and stimulate the vitality of micro‑entities to ensure effective implementation of the policies.