Haibao News:

Recently, the PBC and relevant departments introduced guidelines on ramping up financial support to effectively boost consumption. What specifically are the main measures? Thank you.

Zou Lan:

I would like to invite Mr. Peng to answer this question.

Peng Lifeng:

Thank you for your question. Boosting consumption is the top priority for the economic work in 2025. In accordance with the decisions and arrangements of the CPC and the State Council, the PBC, in collaboration with relevant departments, issued guidelines on ramping up financial support to effectively boost consumption. These guidelines aim to direct financial institutions to enhance their services from both supply and demand sides of consumption, so as to fulfill the diverse financing needs of business entities and consumers. It seeks to expand the supply of high-quality consumption and help unleash the potential for consumption growth. 

First, supporting the enhancement of consumption capacity and fostering consumption demand. For residents to consume, they need an income, and to have an income, they need jobs. Therefore, stable employment and income growth are fundamental to expanding household consumption. The guidelines focus on supporting employment, increasing residents' income from property, strengthening insurance protection, and other obvious areas of financial support. Specifically, the document proposes thoroughly implementing policies on guaranteed entrepreneurship loans, innovating products for financial wealth management, and optimizing insurance coverage systems for elderly care and health, among other measures.

Second, building a multi-tiered financial service system to support consumption, so as to meet the financing needs of market entities in the consumption sector in all aspects. The guidelines require giving play to the leading role of credit, making good use of refinancing policy tools, and maximizing support for first-time loans, renewal loans, and medium- and long-term loans for eligible business entities. The document also discusses maximizing support for bonds and equities and expanding diversified consumption financing channels. 

Third, providing targeted financial support for key areas of consumption to improve the efficiency of financial resource allocation. The guidelines focus on main areas as determined by industry departments, such as commodity consumption, service consumption and new forms of consumption, as well as circulation and other key stages of consumption. It requires financial institutions to innovate financial products in line with consumption contexts and characteristics, and promote the advancement of quality and efficiency of financial services in the consumption sector.

Fourth, strengthening basic financial services to aid the optimization of the consumption environment, and enhancing the willingness and enthusiasm of consumers to consume. The guidelines propose continuous optimization of consumption payment services in food, accommodation, transportation, travel, shopping, entertainment, medical care and other key consumption contexts. They call for improving the establishment of the credit system in the consumption sector and strengthening the protection of financial consumers' rights. 

It should be emphasized that service consumption is crucial to boosting overall consumption and expanding domestic demand. It also has an advantage in creating and absorbing employment. Commodity consumption in China is relatively well-developed, as its share of GDP is basically on par with international levels. However, service consumption remains comparatively insufficient and has plenty of room to develop. At present, the service consumption market demand is relatively high, and financial support to meet the demand is generally adequate. The primary obstacle to expanding service consumption, however, lies in supply. Therefore, the PBC has specially established a 500 billion yuan refinancing facility for service consumption and elderly care. The purpose is to guide financial institutions to provide targeted support to accommodation, catering, culture, tourism, sports, entertainment, education, elderly care and other service sectors to increase high-quality supply and make up for the shortcoming. This will give more play to the role of consumption in developing the economy and promote the formation of a positive cycle in which supply creates demand, and demand drives supply.

Going forward, the PBC will work in conjunction with relevant departments to continuously strengthen the coordination of financial, fiscal and industrial policies. We will guide local governments and financial institutions to accelerate the effective implementation of the guidelines, make every effort to enhance financial service for consumption, and provide strong financial support for boosting and expanding consumption. Thank you.