Better Coordination, Refined Fiscal-Financial Policies to Boost Domestic Demand, Says Ministry

China has been implementing refined fiscal and financial policies with better coordination since the beginning of this month to boost domestic demand, a finance ministry official said on Friday.

The policies, which have been regularly fine-tuned since their launch, include expansion in the scope of interest subsidies, increase in the number of eligible agencies, and raising the subsidy quota's upper limit, Vice Finance Minister Liao Min told a press conference held by the State Council Information Office.

For the expansion of interest subsidy scope, newly released capital loans have been included in the scheme for micro, small and medium-sized enterprises (MSMEs), which used to involve only fixed asset loans. For consumers, the interest subsidies can be applied for car purchase and home renovation if they are transacted through credit card installments.

Also, about 400 companies, up from the previous 100, are now allowed to conduct the interest subsidy program. They include national banks, as well as urban commercial banks, rural cooperative financial institutions, private banks and foreign-funded banks, with the aim to achieve broader coverage of urban and rural business operators.

At the same time, the maximum size of interest-subsidized loans available to eligible MSMEs will rise from 50 million yuan (US$7.5 million) to 75 million yuan. For qualified service-sector business entities, the cap will be increased from 10 million yuan to 20 million yuan. The ceiling of interest subsidies for eligible personal consumption loans will be lifted from 3,000 yuan to 5,000 yuan, to better meet investment and consumption needs of market entities.

"In light of economic development requirements, we will continue to formulate new policies and measures, which will be rolled out in the second half of this year... Meanwhile, stronger overall coordination will be pursued," Liao said.