China's 100 Billion RMB Demand-Boosting Fund Aids 1.31 Trillion Consumption, 1.24 Trillion Investment

The Central Economic Work Conference held at the end of 2025 proposed implementing more proactive and effective macro policies, enhancing their forward-looking, targeted and coordinated nature, and continuing to expand domestic demand while optimising supply. The 2026 Government Work Report established a special fund of 100 billion RMB for fiscal-financial coordination to boost domestic demand. A meeting of the Political Bureau of the CPC Central Committee held on July 30 further stressed optimising the implementation of the fiscal-financial coordination policy for domestic demand. The policy has been positioned as an important innovation in macro-control; through the deployment of the special fund, the package aims to amplify the policy multiplier effect and support the economy's development towards new drivers and higher quality.

In 2026, the central government has arranged 100 billion RMB to launch a package of six fiscal-financial coordination policies to boost domestic demand, comprehensively applying tools such as loan interest subsidies, financing guarantees and risk sharing to promote consumption and expand investment. Local governments have refined policy measures in light of regional economic characteristics, and the effects of implementation are gradually emerging. Specific measures include: leveraging social capital through industrial funds, adopting market-oriented operating models to drive social capital participation; lowering financing costs through loan interest subsidies and guiding bank credit towards consumption and the real economy; relying on professional guarantee institutions to provide credit enhancement for business entities lacking collateral; and applying risk-sharing mechanisms to compensate commercial banks and financing guarantee institutions for credit losses, thereby strengthening their willingness to extend credit.

Statistics show that from January to June 2026, the two consumption-boosting policies benefited household consumption of approximately 1.31 trillion RMB, while the four investment-expansion policies benefited private investment of more than 1.24 trillion RMB. In practice, fiscal-financial coordination to boost domestic demand still faces certain problems: policy coordination mechanisms are imperfect, with many localities yet to establish routine, institutionalised coordination working mechanisms; the multiplier effect of fiscal funds has not been fully realised, with some regions relatively weak in leveraging financial and social capital; and some grassroots areas lack implementation capacity, with issues such as inadequate policy interpretation and low approval efficiency.