BEIJING: China will see the implementation of new financial policies to strengthen fiscal and financial coordination, outlined Liao Min, Vice Minister of Finance, during a press conference held by China’s State Council Information Office (SCIO) on Wednesday.
Liao detailed the two new policies: first, an interest subsidy for personal consumer loans, and second, subsidized loans for businesses in the services sector.
The interest subsidy for personal consumer loans will directly benefit the general public, said Liao, highlighting that the policy will cover single consumptions of less than 50,000 yuan ($6,965), or exceeding such in a number of specific areas, such as education, elderly care and healthcare, among others.
Meanwhile, businesses eligible for subsidized loans will come from eight major consumer services areas: catering and accommodation, health, elderly care, childcare, housekeeping, culture and entertainment, tourism and sports. With a maximum loan threshold of 1 million yuan, at an interest rate subsidy of 1 percentage point for such businesses.
The focus of the two policies is for wide coverage at low thresholds, said Yu Hong, director of the finance department at the Ministry of Finance. Only basic conditions have to be met for people to receive financial support, Yu added.
China’s six major state-owned commercial banks – including the Agricultural Bank of China, Industrial and Commercial Bank of China, and Bank of China – have announced plans to implement the newly introduced interest subsidy policy for personal consumption loans, following the policy release on Tuesday.
Several national joint-stock commercial banks, such as China Merchants Bank, China Guangfa Bank, and Industrial Bank have also announced that they will offer interest subsidies to eligible loans.
The policies focus on both the supply and demand sides of consumption, Liao noted, shifting more fiscal and financial policy focus toward benefitting people’s livelihoods and promoting consumption.
