China's finance ministry unveils policy package to encourage private investment, consumption

BEIJING -- China's Ministry of Finance (MOF) on Tuesday released a package of measures to spur private investment and consumption, including a special guarantee program for corporate lending and interest subsidies for personal consumption loans.

This special guarantee program, with a total scale of 500 billion yuan (about $71.42 billion), is aimed at supporting private investment by micro, small and medium-sized enterprises, according to official documents jointly released by the MOF and several other departments.

Implemented through the National Financing Guarantee Fund over a two-year period, the program will cover not only medium- and long-term loans, but also financing needs related to daily operations, such as factory expansion, shop renovations and working capital.

Meanwhile, the ministry will roll out a loan interest subsidy policy for micro, small and medium-sized enterprises, covering newly issued fixed-asset loans and funds provided by the government's new policy-based financial instruments from Jan 1.

The policy will focus on key industrial chains and their upstream and downstream sectors, as well as producer services.

Interest subsidies will be set at 1.5 percentage points per year, with a maximum subsidy period of two years. The loan amount eligible for subsidies will be capped at 50 million yuan per borrower, with the maximum interest subsidy per borrower set at 1.5 million yuan.

The policy will initially be implemented for one year, with the possibility of extension based on actual conditions.

In a move to bolster consumption, the MOF on Tuesday also optimized and extended existing interest subsidy policies for loans to business entities in the service sector and for personal consumption loans to the end of 2026.

The service-sector loan subsidy policy, notably, has expanded coverage to digital, green and retail sectors, with the maximum loan amount eligible for subsidies per borrower raised from 1 million yuan to 10 million yuan and the subsidy cap increased to 100,000 yuan.

The personal consumption loan subsidy policy will include credit card installment services, removing sectoral restrictions.

In addition, the MOF has improved its loan interest subsidy policy for equipment upgrades. The updated policy expands support from loans used solely for equipment purchases to equipment upgrades, and incorporates eligible technology innovation loans newly issued from 2026.?