China is doubling down on its efforts to encourage domestic consumption, with the central government and the country’s wealthiest province rolling out policies aimed at providing structural financial support and on-the-ground incentives.
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Continued policy support is crucial to keep China’s domestic consumption afloat as trade uncertainties and unemployment pressures persist, analysts said.
The People’s Bank of China (PBOC) said on Tuesday that a 500 billion yuan (US$69.68 billion) relending quota announced last month will help 21 national financial institutions and five key city commercial banks establish consumption and pension loans.
“We will strengthen incentives with structural monetary policy tools to encourage and guide financial institutions to extend loans to various types of business entities in key areas of service and consumption,” the PBOC said in guidance issued with five other government departments.
The document contains 19 initiatives covering financial support measures for consumers and sellers.
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China’s central bank listed several key sectors it aims to support, including retail, hotels, restaurants, sports, entertainment and tourism.
“We will guide financial institutions to continuously increase financial support in the area of consumption and provide strong financial support for consumption to fulfil its fundamental role in our economic development,” it said.
