China's Vice Minister of Finance: "Support consumption by converting fiscal spending into 'investment in people'"

Vice Minister of Finance: “Support consumption by converting fiscal expenditures into ‘investment in people’”

(Beijing = Yonhap News) Correspondent Jong-gu Han = In response to sluggish domestic demand, the Chinese government has decided to expand interest support for personal consumption loans and loans to small and medium-sized enterprises, and to introduce additional fiscal policies in the second half of this year.

Liao Min, Vice Minister of Finance of China, said at a press conference held by the State Council News Office on the 21st, "We are continuing to research and establish new policies and measures in accordance with the needs of economic development, and will introduce them in the second half of this year."

He continued, “While maintaining the continuity and stability of macroeconomic policies, we will prepare additional policies in a timely manner according to the economic situation and calculate and distribute financial resources considering a longer cycle.”

China's Ministry of Finance announced on this day that it has also supplemented the existing domestic demand promotion policy through the 'Notice on Improving Domestic Demand Promotion Policy through Finance and Finance Linkage'.

It reflects the decision of the Central Political Bureau meeting of the Communist Party of China on the 30th of last month and the status of existing policy implementation, and the key is to expand the target and handling financial institutions of interest support and increase the support limit.

Specifically, credit card installments were included in the interest subsidy, and interest was subsidized by 1% point per year, and the annual support limit for each individual was increased from 3,000 yuan (approximately 610,000 won) to 5,000 yuan (approximately 1.02 million won).

An interest rate of 1% point per annum for up to two years was also supported for new working capital loans for small and medium-sized private companies, and the support limit for corporate loans and financial institutions handling them were also expanded.

At the Politburo meeting last month, the Chinese leadership presented expansion of domestic demand as a key task for economic policy in the second half of the year and announced plans to continue to implement active fiscal policies and easing monetary policies.

Vice Minister Liao said, "We will build stronger, more stable, balanced and sustainable finances during the 15th Five-Year Plan (2026-2030)."

To this end, he explained that he will strengthen financial capabilities and optimize the expenditure structure, while strengthening the macroeconomic control function, deepening fiscal and tax reform, improving the level of financial management, and resolving risks in key areas.

In particular, regarding the structure of fiscal expenditures, he said, "We will transform fiscal expenditures into more 'investments in people' to support domestic consumption and strengthen the internal growth engine that supports the economic cycle centered on domestic demand."