(ICYMI) China outlines 2026-30 plan to lift consumption, shift focus to services

China is lining up a five-year consumption drive, pairing near-term loan subsidies and credit guarantees with a strategic shift toward services-led demand growth.Summary:China plans new 2026–30 policies to lift consumption and address supply-demand imbalances. Officials highlight strong supply but weak demand as a “prominent” issue. Finance ministry extends interest subsidies for consumption and service-sector loans to end-2026. A 500bn yuan guarantee program and MSME loan subsidies aim to spur private investment. Policy focus is shifting toward services consumption while trade-ins for goods continueChina is preparing a fresh five-year push to lift domestic consumption from 2026 to 2030, with policymakers flagging the need to address a “prominent” imbalance between strong supply and weak demand and signalling a growing emphasis on services spending. At a briefing on Tuesday, senior officials from the National Development and Reform Commission (NDRC) said China will roll out new policies over the next five years to spur consumption and better align supply and demand. NDRC vice head Wang Changlin said the supply-heavy, demand-light dynamic remains a clear challenge for the economy. The backdrop is an economy that met its headline growth objective last year, but with domestic demand still lagging the production side. China’s economy grew 5% in 2025, supported by export strength that offset softer consumption. Industrial output rose 5.9% last year versus 3.7% growth in retail sales, underlining the imbalance officials say they want to tackle. Alongside the longer-term consumption plan, China’s Ministry of Finance announced a set of near-term measures aimed at lowering borrowing costs and encouraging spending and private investment. The ministry said it will extend interest subsidies for personal consumption loans and for certain service-sector business loans through the end of 2026, while also extending and refining support for equipment upgrades. Xinhua’s report said the consumption-loan subsidy will be broadened to include credit card instalment services and remove certain sector limits, while the service-sector loan subsidy expands coverage to areas including digital, green and retail. Beijing is also leaning on credit support for smaller private firms. Officials outlined a special guarantee program totalling 500 billion yuan over two years to support private investment by micro, small and medium-sized enterprises, delivered via the National Financing Guarantee Fund, alongside a loan interest subsidy policy for eligible MSME borrowing. On the consumption mix, authorities signalled a gradual pivot away from goods-heavy support toward services. NDRC officials said trade-in subsidies for big-ticket goods such as electric vehicles will continue, but services including elderly care, healthcare and leisure are becoming a central focus as policymakers look for new demand engines.