Latest news with #interest subsidies
Reuters
6 days ago
- Business
- Reuters
China pledges more financial support for consumption with loan interest subsidy
BEIJING/HONG KONG, Aug 13 (Reuters) - China plans to boost domestic consumption by offering interest subsidies on loans to households and businesses, aiming to reduce borrowing costs and spur spending, Vice Finance Minister Liao Min said on Wednesday. Economists have long urged Beijing to switch to a consumption-led economic model and rely less on debt-fuelled investment and exports for growth. Pressures from higher U.S. tariffs have heightened calls for a shift in long-term strategy. The policy "will support domestic consumption to become a major driving force of the national economy," Liao said at a press conference. On Tuesday, China announced it would offer interest subsidies for businesses in eight consumer service sectors, as well as for individual consumers. Eligible businesses and consumers can receive an annual interest subsidy of one percentage point on loans. Consumption of services in China has significant growth potential and the policy will help expand domestic demand and stabilise employment, Wang Bo, an official at China's Ministry of Commerce, said at the press conference. China's major state-owned banks, including Industrial and Commercial Bank of China ( opens new tab, China Construction Bank ( opens new tab and Bank of China ( opens new tab said on Wednesday they would actively implement the new subsidy policy. Unlike previous policies that required banks to offer cheaper loans, the government will shoulder the subsidy costs, showing regulators attach great significance to pressure on banks' profit margins, analysts at Huatai Securities said in a research report. The policy is expected to boost the willingness of households to borrow, while allowing banks to maintain consumer loan rates at a current level of above 3%, the analysts said.
CNA
6 days ago
- Business
- CNA
China pledges more financial support for consumption with interest rate subsidy
BEIJING: China's plan to subsidise some interest on loans aims to ensure households and businesses have more financial resources to reduce credit costs as Beijing looks to boost consumption, China's Vice Finance Minister Liao Min said on Wednesday (Aug 13). The policy will help increase consumption's contribution to the country's economic development, Liao said at a press conference. "It will support domestic consumption to become a major drive force of the national economy," he said. On Tuesday, China announced it would offer interest subsidies for businesses in eight consumer service sectors, as well as for individual consumers. Eligible businesses and consumers can receive an annual interest subsidy of one percentage point on loans. Economists have long urged Beijing to switch to a consumption-led economic model and rely less on debt-fuelled investment and exports for growth. Pressures from higher US tariffs have heightened calls for a shift in long-term strategy. Consumption of services in China has significant growth potential and the policy will help expand domestic demand and stabilise employment, Wang Bo, an official at China's Ministry of Commerce, said at the press conference on Wednesday. China's major state-owned banks, including Industrial and Commercial Bank of China, China Construction Bank and Bank of China said on Wednesday they would actively implement the new subsidy policy.
Reuters
6 days ago
- Business
- Reuters
China pledges more financial support for consumption with interest rate subsidy
BEIJING/HONG KONG, Aug 13 (Reuters) - China's plan to subsidise some interest on loans aims to ensure households and businesses have more financial resources to reduce credit costs as Beijing looks to boost consumption, China's Vice Finance Minister Liao Min said on Wednesday. The policy will help increase consumption's contribution to the country's economic development, Liao said at a press conference. "It will support domestic consumption to become a major drive force of the national economy," he said. On Tuesday, China announced it would offer interest subsidies for businesses in eight consumer service sectors, as well as for individual consumers. Eligible businesses and consumers can receive an annual interest subsidy of one percentage point on loans. Economists have long urged Beijing to switch to a consumption-led economic model and rely less on debt-fuelled investment and exports for growth. Pressures from higher U.S. tariffs have heightened calls for a shift in long-term strategy. Consumption of services in China has significant growth potential and the policy will help expand domestic demand and stabilise employment, Wang Bo, an official at China's Ministry of Commerce, said at the press conference on Wednesday. China's major state-owned banks, including Industrial and Commercial Bank of China ( opens new tab, China Construction Bank ( opens new tab and Bank of China ( opens new tab said on Wednesday they would actively implement the new subsidy policy.
CNA
7 days ago
- Business
- CNA
China offers interest subsidies for loans to boost consumption
BEIJING: China will offer interest subsidies for businesses in eight consumer service sectors including catering and tourism, in a bid to support services consumption amid a slowing economy. Eligible businesses can receive an interest subsidy of one percentage point on loans from 21 national banks, nine government departments, including the Ministry of Finance, said in a statement on Tuesday (Aug 12). The maximum loan amount eligible for the interest subsidy for a single entity could be as much as 1 million yuan (US$139,095), the statement said. The move aims to reduce financing costs "for service industry operators" and boost the consumer market, it added. Chinese economists and policy advisers have called for stepping up support for the country's burgeoning services sector to boost consumption, which top leaders made a priority this year to spur growth amid US tariff disputes. The central government and provincial governments will bear 90 per cent and 10 per cent of the cost of the subsidy funds, respectively. The subsidy period would not exceed one year, it said. The preferential policy applies to loan contracts signed between Mar 16 and Dec 31 this year. The loans involved include fixed asset and working capital loans for enhancing business infrastructure and services capabilities. Separately on Tuesday, financial regulators said they would offer interest subsidies for individuals who take consumer loans, to reduce borrowing costs and stimulate consumer spending. Consumers can receive an interest subsidy of one percentage point on loans for single purchases of no more than 50,000 yuan (US$6,954) for goods including vehicles and electronics, according to a statement released jointly by three financial regulators. Eighteen national banks and five online lending platforms, including Tencent's private lender WeBank and Chongqing Ant Consumer Finance, a unit of China's Ant Group, are among the lending institutions eligible for the preferential policy, the statement said. In May, the central bank rolled out a 500 billion yuan re-lending facility for elderly care and services consumption, in a bid to encourage banks to offer financial support to the accommodation, catering, education and elderly care sectors. China has also allocated 231 billion yuan in special treasury bonds for a consumer goods trade-in programme - out of the annual quota of 300 billion yuan - with a focus on home appliances, cellphones, and tablet computers.
Reuters
7 days ago
- Business
- Reuters
China offers interest subsidies for consumer services enterprises
BEIJING, Aug 12 (Reuters) - China will offer interest subsidies for enterprises in eight consumer service sectors including catering and tourism, in a bid to support services consumption amid a slowing economy. The maximum loan amount eligible for the interest subsidy for a single entity could be up to 1 million yuan ($139,095), nine government departments, including the Ministry of Finance, said in a statement on Tuesday. ($1 = 7.1893 Chinese yuan renminbi)
