FINANCE

China Offers Subsidized Loans to Small Businesses in New Stimulus Push

Published: Jan. 10, 2026 3:46 a.m. GMT+8

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A manufacturing industrial park in Yichang. Photo: VCG

China unveiled a new package of fiscal and financial measures aimed at jumpstarting domestic demand, including — for the first time — nationwide interest subsidies on loans to small, midsize and micro enterprises.

The policy suite, announced after a State Council meeting chaired by Premier Li Qiang on Friday, underscores Beijing’s push to stimulate sluggish spending and business activity. The measures are designed to lower financing costs for private businesses and strengthen household consumption.

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China introduced nationwide interest subsidies on loans to small, midsize, and micro enterprises to boost domestic demand.
The State Council is expanding loan support, private investment programs, and optimizing subsidy schemes, with most funding from the central government.
Previous subsidy efforts had limited impact, with household loans contracting by 206.3 billion yuan ($29.4 billion) in November 2025.

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Who’s Who

Huatai Securities: Huatai Securities is mentioned in the article as the employer of chief macroeconomist Yi Huan. Yi Huan estimated that two earlier interest subsidy programs from 2025 cost between 20 billion and 30 billion yuan annually, implying these programs had a muted effect on stimulating consumer demand despite their cost.

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What Happened When

August 2025：: China launched interest subsidy programs to support service-sector firms and personal consumption, offering a 1% annual interest subsidy with 90% of funding from the central government.

November 2025：: Household loans in China contracted by 206.3 billion yuan ($29.4 billion), indicating limited effectiveness of earlier subsidy programs.

January 10, 2026：: China announced a new package of fiscal and financial measures after a State Council meeting chaired by Premier Li Qiang, including nationwide interest subsidies for loans to small, midsize, and micro enterprises.

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