Loan subsidies set to boost consumption

Experts say policy will help ease debt burdens, stimulate economic recovery

China has unveiled a policy granting interest subsidies for consumer loans for a year, in a bid to cut household borrowing costs, stimulate spending, and accelerate economic growth by aligning fiscal and monetary measures.

Vice-Minister of Finance Liao Min said on Wednesday this marks the first time the central government has subsidized individual consumer loans. From Sept 1, 2025, to Aug 31, 2026, those taking out personal consumer loans — excluding credit cards — from approved lenders and use them for actual consumption will qualify for the program.

The subsidy covers single transactions under 50,000 yuan ($6,968) and single transactions of 50,000 yuan or more in key areas such as autos, elderly care, childbirth, education and training, culture and tourism, home furnishing and renovation, electronics and healthcare. At 1 percentage point, the subsidy ratio is about one-third of current commercial bank rates for such loans.