BEIJING, Jan. 20 (Xinhua) -- China on Tuesday unveiled a comprehensive policy package leveraging fiscal and financial synergy to boost consumption and energize private investment, further igniting the domestic demand engine.
Experts and industry insiders view this coordinated launch as an important measure to carry out central authorities' decisions and an innovative practice of implementing a more active fiscal policy.
He Daixin, a researcher at the Chinese Academy of Social Sciences, noted that the move focuses on the two key areas of stimulating private investment and promoting consumer spending, and by ramping up policy support, the package sends a positive signal.
The package directs substantial support toward the private sector through a new special guarantee program with a scale of 500 billion yuan (about 71.42 billion U.S. dollars). Implemented through the National Financing Guarantee Fund over a two-year period, the program will cover not only medium- and long-term loans, but also financing needs related to daily operations, such as factory expansion, shop renovations and working capital.
Bei Duoguang, president of the Chinese Academy of Financial Inclusion at Renmin University of China, highlighted the program's long-term orientation.
It will provide guarantees for eligible loans extended to micro, small and medium-sized enterprises (MSMEs) for private investment, particularly medium- and long-term financing for scenario expansion and upgrades, thereby encouraging banks to expand their lending of medium- and long-term fixed-asset loans to MSMEs and addressing a relative weakness in their funding, Bei said.
Meanwhile, consumption played a more pronounced "ballast" role as the country shifted toward making domestic demand the main engine and stabilizing anchor of economic growth. Total retail sales of consumer goods topped 50 trillion yuan in 2025, rising 3.7 percent from a year earlier and consolidating China's position as one of the world's largest retail markets.
Aiming to sustain this momentum and further unleash the potential of domestic demand, the Ministry of Finance on Tuesday also optimized and extended existing interest subsidy policies for loans to business entities in the service sector and for personal consumption loans to the end of 2026.
The service-sector loan subsidy policy, notably, has expanded coverage to digital, green and retail sectors, with the maximum loan amount eligible for subsidies per borrower raised from 1 million yuan to 10 million yuan and the subsidy cap increased to 100,000 yuan.
The personal consumption loan subsidy policy will include credit card installment services, removing sectoral restrictions.
"Fiscal and financial policies are working in synergy to amplify their impact," He Daixin said. By combining loan subsidies with guarantee mechanisms, the policy seeks to align government, banks, guarantee organizations and businesses in channeling social resources into priority sectors, thereby boosting domestic demand more effectively.
Looking beyond the current policy horizon, China's top economic planner pledged on Tuesday to formulate a strategic implementation plan for expanding domestic demand for the 2026-2030 period.
The National Development and Reform Commission said that the plan aims to adapt to consumption upgrades and technological shifts, fostering a virtuous cycle where "new demand steers new supply and new supply creates new demand" through robust innovation support. ■
