PBOC Unveils Trillion-Yuan Support Measures as Beijing Steps Up Growth Push

China’s central bank cut targeted lending rates, expanded financing quotas and pledged flexible liquidity support as policymakers move to stabilise growth.

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The People’s Bank of China announced a broad package of monetary support measures, including rate reductions, expanded lending facilities and fresh liquidity tools, as authorities intensify efforts to support economic growth and structural transformation.

Deputy Governor Zou Lan said at a State Council Information Office briefing on Jan. 15 that the measures are designed to strengthen financing conditions for businesses, innovation sectors and private enterprises while maintaining ample market liquidity.

Effective Jan. 19, borrowing costs on several structural monetary policy tools — including re-lending and re-discounting facilities — will be lowered by 25 basis points.

Three-month, six-month and one-year re-lending rates for agriculture and small businesses were reduced to 0.95%, 1.15% and 1.25%, respectively.

The re-discount rate was cut to 1.5%, while the pledged supplementary lending rate was lowered to 1.75%. Other specialised structural facilities were unified at 1.25%.

In a push to support technological innovation, the central bank raised quotas for re-lending linked to equipment upgrades and industrial technology investment to RMB 1.2 trillion from RMB 800 billion.

Eligibility was also broadened to include private small and medium-sized enterprises with stronger research and development intensity.

To improve financing access for smaller firms, the PBOC said it would integrate agriculture and SME lending quotas while adding RMB 500 billion in new re-lending capacity.

Separately, officials launched a RMB 1 trillion facility focused on private small and medium-sized enterprises, aimed at easing targeted financing pressures.

Authorities also moved to support the property sector.

In coordination with the National Financial Regulatory Administration, the minimum down-payment ratio for commercial property loans was reduced to 30%, in an effort to revive financing demand in the commercial real-estate market.

Under China’s green-finance framework, the central bank expanded eligibility for carbon-reduction support programs to include projects such as energy-efficiency upgrades and green transformation initiatives.

Annual operations under the scheme will be capped at RMB 800 billion.

The PBOC added that it would conduct government bond purchase and sale operations flexibly, taking into account liquidity needs, supply-demand dynamics and yield-curve movements to maintain stable financial conditions.

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