Consumers shop at the food section of a supermarket in Huaian, East China's Jiangsu Province, on December 31, 2025. Photo: VCG

China's Ministry of Finance (MOF) and several other government departments announced a series of policy measures, including interest subsidies for medium-sized, small and micro entreprises, aimed at ramping up domestic demand and inducing more investment to fully unleash economic potential and strengthen economic resilience, according to the MOF.

Starting from January 1, 2026, for qualifying fixed-asset loans and certain new policy-based financial instruments utilized by medium-sized,  small and micro enterprises, the central government will provide interest support with an annual subsidy rate of 1 percent, with subsidy duration of no more than 2  years, according to an announcement  by the MOF, the National Development and Reform Commission, the Ministry of Industry and Information Technology, People's Bank of China (PBC), and the National Financial Regulatory Administration (NFRA).

Loans eligible for interest subsidies are capped at 50 million yuan ($7.18 million) per entity. The policy is currently scheduled for an initial implementation period of one year, with the possibility of extension depending on future developments, the announcement noted.

In addition, the MOF, the PBC and the NFRA jointly announced on Tuesday to extend that the policy of providing interest subsidies for qualifying personal consumption loans to December 31, 2026. Notably, credit card lending issued by financial institutions is included in the latest policy, with an annual subsidy rate of 1 percentage point, according to the document.

In a separate notice aimed at optimizing the implementation of interest subsidy policies for equipment upgrading, the MOF and relevant government departments expanded the scope of support.

According to the document on the MOF website, science and technology innovation loans newly issued by banks starting in 2026 - which are included in the country's re-lending policies for tech innovation and manufacturing sector transformation - will be incorporated into the scope of interest subsidy support. This policy will be implemented until December 31, 2026.

To thoroughly implement the decisions of the Communist Party of China Central Committee and the State Council on vigorously boosting consumption and expanding domestic demand, guide financial institutions to increase support for expanding domestic demand, promote the supply of high-quality services, innovate diversified consumption scenarios, and unleash the potential of service consumption, the MOF and related government agencies also announced measures to optimize the interest subsidy policy for service industry entities.

While extending the implementation period of the policy for service enterprises to the end of 2026, the document also includes digital, green and retail sectors into policy support, in addition to eight existing categories: catering and hospitality, healthcare, aged care, childcare, household services, cultural entertainment, tourism, and sports.