China seeks to bolster demand by subsidising interest costs on consumer loans
Individuals who take out consumer loans for purchases – including single transactions below 50,000 yuan (US$6,958) and higher amounts for purchases in key sectors such as cars and education – will have part of their interest costs covered by the government, according to the plan released on Tuesday by the Ministry of Finance, the People's Bank of China and the National Financial Regulatory Administration.
The authorities said the plan aims to 'better leverage fiscal funds to support and guide consumption, lower the cost of consumer credit for households, and help unlock their spending potential'.
The plan will subsidise one percentage point of the annual interest on loans, capped at half of the contracted loan interest rate. The central government will cover 90 per cent of the subsidy cost, with provincial governments responsible for the remaining 10 per cent.
It will run from September 1 until the end of August next year, and the authorities said they might consider extending or expanding it after assessing its effectiveness.
This new personal consumer loan subsidy targets the demand side, directly benefiting individual consumers
Ministry of Finance official
China's top leadership has made boosting consumption a top policy priority, with Beijing having already rolled out a 30-point policy package and allocated 300 billion yuan to a consumer goods trade‑in programme.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
39 minutes ago
- South China Morning Post
Trump's chip deal signals a new ‘pay-to-play' China trade policy, analysts say
US President Donald Trump's 'unprecedented' deal to allow exports of some advanced chips to China in exchange for a cut of the revenues – and hints that similar deals for other industries are being considered – signals that Washington is moving towards a potentially dangerous 'pay to play' foreign trade policy, analysts said. Conflicts of interest loom if the revenue-sharing model takes root, which could make it harder for American investors and exporters to do business in the world's second-largest economy, they added. Trump announced a deal on Monday by which the leading American chip designers AMD and Nvidia will be allowed to export several advanced chip models to China, with the companies contributing 15 per cent of the sales revenue to the US government. US Treasury Secretary Scott Bessent on Wednesday said the export revenue-sharing deal could serve as a blueprint for other industries. In a TV interview with Bloomberg Surveillance, Bessent praised the arrangement as a 'unique solution' from Trump. 'I think we could see it in other industries over time,' Bessent said in the interview. 'Right now, this is unique, but now that we have the model and the beta test, why not expand it?' Analysts said AMD and Nvidia could comfortably share revenue because their deals covered older-model artificial intelligence accelerators that they had custom-made for the Chinese market. But other companies might face far greater problems if the US government asks them for a cut of the sales from their mainstream products.
South China Morning Post
an hour ago
- South China Morning Post
Hong Kong's ‘virtually unchanged' population stabilises for first time in decade
Hong Kong's population has stabilised and remains 'virtually unchanged' for the first time in a decade, following an influx of talent in recent years after waves of emigration. The Census and Statistics Department said on Thursday that Hong Kong's midyear population stood at 7,527,500, a slight increase of 3,400 from 12 months ago, or a rise of about 0.005 per cent. 'The population remained virtually unchanged, as compared with that at mid-2024,' the government said, attributing it to ongoing measures to attract talent and import workers. 'Over the past few years, many people have moved to Hong Kong from mainland China and other places around the world.' The inflow had offset the impact of the natural population decrease to stabilise the overall number, the department said. The latest population marked an increase of more than 180,000 compared with mid-2022, it added. It is the first time since 2015 that the population has not changed by at least 0.2 per cent.
South China Morning Post
2 hours ago
- South China Morning Post
Recurrent profits for Hong Kong's MTR Corp drop 15.7% in ‘eventful' first half
Hong Kong rail giant the MTR Corporation has reported a 15.7 per cent drop in recurrent-business profit to HK$3.39 billion in the first six months of this year from the same period in 2024 due to higher operating costs. After taking into consideration property gains and losses from a one-off revaluation of investment properties, the group said on Thursday that its net profit jumped 27.5 per cent to HK$7.7 billion during the first half of 2025. MTR Corp CEO Jacob Kam Chak-pui said that business over the period had been 'eventful'. 'The first six months of 2025 proved to be an eventful time that saw the MTR take meaningful steps forward in its expanding capital works programme, while rising patronage figures drove solid results for the company's operating revenue,' he said. Kam added that the company was in the 'harvesting stage' of its earlier property development projects. It recorded a property development profit of HK$5.54 billion in the first six months of this year compared with HK$1.74 billion in the same period in 2024, mainly from two packages near Ho Man Tin station and another two at The Southside mall near Wong Chuk Hang station.
