ECONOMY

China Aims to Boost Consumption With Loan Subsidies

Published: Aug. 13, 2025 7:54 p.m. GMT+8

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Within a few years, Chinese pharmaceutical firms have progressed from licensing Western innovations to developing blockbuster drugs. For the U.S., this shift is more than just a distant warning; it represents a direct challenge to its leadership in innovation. Photo: AI generated

China has launched two new stimulus measures to subsidize interest payments on loans to consumers and service providers, as the country steps up efforts to boost domestic consumption.

The subsidy for eligible consumer loans will run from Sept. 1, 2025, to Aug. 31, 2026, under which the government will subsidize 1 percentage point of the interest, according to one of the two documents released Tuesday by government agencies including the Ministry of Finance and the People’s Bank of China (PBOC). The subsidy will be capped at 50% of the loan’s contractual interest rate.

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China launched two new stimulus policies subsidizing 1 percentage point of interest on eligible consumer and service sector loans, with consumer loan subsidies capped at 50% of the interest rate.
Business subsidies cover loans up to 1 million yuan per company in eight service sectors, for up to one year.
The measures aim to boost domestic consumption and improve both the supply and demand for high-quality services.

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