FINANCE

Banks Gear Up for Beijing’s Subsidized Lending Campaign

Published: Aug. 6, 2025 4:53 a.m. GMT+8

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Last week, China’s cabinet approved a new policy to subsidize interest payments on personal consumer loans and loans to service sector companies

China’s largest banks are preparing to offer consumer loans with interest subsidies in a government-led effort to boost household spending and support the flagging services sector, though lenders still await critical guidance from regulators on how to implement the policy.

Last week, China’s cabinet approved a new policy to subsidize interest payments on personal consumer loans and loans to service sector companies — the latest in a series of government efforts to bolster flagging domestic consumption.

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China’s largest banks plan to offer consumer loans with government-subsidized interest to boost domestic spending, awaiting detailed regulatory guidance for implementation.
Local pilot programs offer interest subsidies of 1.5%–2%, mainly for purchases like cars and home appliances, providing models for the national initiative.
Banks face operational concerns over fund monitoring and potential fraud due to undefined rules and intense market competition.

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Who’s Who

Industrial and Commercial Bank of China Ltd.: Industrial and Commercial Bank of China Ltd. (ICBC) is one of China's six largest state-owned lenders. The ICBC is preparing to offer consumer loans with interest subsidies. This is part of a government-led initiative to boost household spending. The bank has publicly committed to rolling out these new lending programs and is actively preparing for their implementation, emphasizing market-driven principles.

China Construction Bank Corp.: China Construction Bank Corp. (CCB) is among the six largest state-owned lenders preparing to offer consumer loans with interest subsidies. This initiative is part of a government effort to boost household spending. CCB has publicly committed to rolling out these new lending programs, awaiting official guidance for effective implementation.

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What Happened When

Since early 2024：: Sichuan province, Chongqing, and Hangzhou’s Yuhang district have launched their own consumer loan subsidy programs.

Last week (relative to article's timing; can interpret as Before June 2024)：: China’s cabinet approved a new policy to subsidize interest payments on personal consumer loans and loans to service sector companies.