China issues guidelines on financial support to boost consumer spending

The People's Bank of China and five other departments released guidelines aimed at strengthening financial support for consumption on Tuesday, taking a pragmatic, coordinated step toward expanding consumption in a sustainable way.

The guideline, outlining 19 sets of measures, includes initiatives such as launching a central bank lending program worth 500 billion yuan ($69.7 billion) aimed at supporting services consumption and elderly care, supporting high-quality enterprises in the consumption industry chain to finance through IPOs and facilitating eligible companies in cultural, tourism and education sectors to issue bonds.

Additionally, the guideline supports the issuance of real estate investment trusts for qualified consumer infrastructure projects and encourages pilot regions to promote the use of the digital yuan or e-CNY in the consumer sector in a sound manner.

It also called for innovating financial products tailored to household wealth management needs and better regulating investment and wealth management services to increase residents' property-based income.

Furthermore, the document encourages the active provision of car loans, considering borrowers' credit levels and repayment capabilities to determine loan ratios, terms and interest rates reasonably, while allowing for appropriate waivers of prepayment penalties during the process of trading in old cars for new ones.