China extends subsidies to drive up domestic demand

China will extend interest subsidies for consumers, service businesses and those in need of equipment upgrades to revive softening domestic demand, ‍the Ministry ⁠of Finance said on Tuesday. The subsidies ‍will be extended to the end of 2026 and the ministry will also ‌roll out interest subsidies for ‍up to two years ‌for ‌loans ‌extended to small and micro-sized private firms from this year, ⁠according to statements on its website. The extension covers consumer loan interest as well as credit card instalments, the ministry said. The government also announced a special guarantee programme with a total scale of 500 billion yuan to support investment by micro, small and medium-sized private enterprises. The programme, implemented through the National Financing Guarantee Fund over a two-year period, 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, according to a notice jointly released by several departments including the Ministry of Finance. The nation, the commission said, is also researching the establishment of a national-level mergers and acquisitions fund as part of efforts to optimize the layout of government investment funds and strengthen guidance over their investment direction in an attempt to accelerate the development of "new quality productive forces". News of the guarantee plan came as the National Development and Reform Commission said in a press conference that the country would formulate and release an implementation plan this year for its strategy to expand domestic demand for between 2026 and 2030. The 15th Five-Year Plan for this period, expected to be approved in March, will implement policies to address this key issue, the commission's deputy head, Wang Changlin, said, adding that "the current economy faces the problem of strong supply but weak demand". The commission, he vowed, would "create new demand through new supply and provide strong innovative measures". (Xinhua/agencies)