China allocates RMB100 billion for 2026 fiscal-financial demand-boosting package; H1 new related loans top
The central government has earmarked RMB100 billion in 2026 to roll out a fiscal-financial policy package aimed at spurring domestic demand. The package combines two consumption measures (interest subsidies for personal consumption and service-operator loans) with four investment measures (subsidies for MSME and equipment-upgrading loans, a private investment guarantee plan, and a bond risk-sharing mechanism). In the first half, new loans in these four categories exceeded RMB17 trillion, a 4.6% year-on-year increase. The consumption policies supported about RMB1.31 trillion in household spending, benefiting 99 million person-times. Service retail sales outpaced goods, and credit lines for private MSMEs expanded markedly. The leadership has signaled further policy refinement in the second half.
The central government has allocated RMB100 billion to implement a package of fiscal-financial policies designed to boost domestic demand. The package includes two consumption-promoting measures—optimizing interest subsidies for personal consumption loans and for loans to service-sector operators—and four investment-expanding measures: interest subsidies for micro, small and medium enterprise (MSME) loans, interest subsidies for equipment-upgrading loans, a dedicated guarantee programme for private investment, and a risk-sharing mechanism for private enterprise bonds. The fiscal funds are deployed as interest subsidies, guarantee capital, and risk compensation, enhancing creditworthiness and lowering costs for credit extension, with the aim of leveraging bank lending and social capital toward expanding domestic demand.
In the first half of 2026, newly issued loans across the four targeted areas—MSME loans, equipment-upgrading loans, loans to service-sector operators, and personal consumption loans—totaled over RMB17 trillion, up 4.6% from a year earlier. The two consumption-promoting policies supported approximately RMB1.31 trillion of household consumption, and around 99 million person-times benefited from the interest subsidies. Growth in service retail sales was notably stronger than that in goods retail sales. The bank credit lines extended to private MSMEs expanded significantly, and their loan approval rates rose steadily.
When arranging economic work for the second half of 2026, the Political Bureau of the CPC Central Committee emphasized refining the implementation of the coordinated fiscal-financial demand-boosting policy. Earlier, the interest-subsidy policies for personal consumption loans, loans to service-sector operators, and equipment-upgrading loans were upgraded on existing foundations, including raising subsidy ceilings, broadening the scope of support, adding processing institutions, and improving working mechanisms. These steps responded to the appeals of consumers and business operators, enhancing the precision and effectiveness of the policies.