Coordinating with the central bank! Five fiscal policies implemented: providing a floor rather than strong stimulus, interest subsidies deeply tied to industrial policies

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On January 20, the Ministry of Finance released five policy documents consecutively on its official website, covering four interest subsidy policies and one special guarantee program, and held a press conference that afternoon to provide a systematic interpretation.

Overall, this policy package can be summarized as "three optimizations, two new additions": based on continuing the existing policy framework, it extends the policy period, expands the support scope, raises the quota per household, and meanwhile newly adds interest subsidies for small and micro enterprises and a special guarantee tool for private investment, aiming to lower financing thresholds and costs, with a focus on key areas such as consumption recovery, equipment upgrades, small and medium-sized enterprises, and private investment.

Several institutions pointed out that this round of policies is not introduced in isolation, but is highly coordinated and seamlessly connected with the previous structural monetary policies of the central bank. From the perspective of pace and tool design, fiscal and monetary policies have taken preemptive action early in the year, reflecting the policymakers’ clear emphasis on a "bottom-line logic" for stabilizing growth.

I. From "Short-term Stimulus" to "Mid-term Stabilization": Comprehensive Extension of Interest Subsidy Policies

In terms of policy form, the most notable change is the overall extension of the duration of the interest subsidy policies. The three policies for personal consumption loans, equipment renewal loans, and service sector business loans are all extended to the end of 2026 with the subsidy ratio unchanged, but with obvious relaxation in quota, scope, and participating institutions.

Industrial Securities Macro pointed out that the core feature of this round of policies is "stable price, increased volume": that is, while the subsidy ratio remains unchanged, the upper limit is removed, the coverage is expanded, and the actual accessibility of the policy is increased. This design means the policy is not seeking a short-term, pulse-like release, but rather provides a more stable and predictable financial support environment for economic recovery.

In the area of personal consumption loans, the policy for the first time includes credit card installment business under interest subsidy support, while removing previous restrictions on single or cumulative subsidy amounts, retaining only the annual subsidy cap of 3,000 yuan, and relaxing restrictions on consumption areas. The policy intention is that, as residents’ willingness to consume remains cautious, reducing the marginal financing cost and improving payment conditions for service-oriented and experience-type consumption can provide gentle support for consumption.

The interest subsidy policy for service industry business loans is clearly tilted toward "supply-side recovery": the maximum subsidized loan per household is raised from 1 million yuan to 10 million yuan, and new consumption areas such as digital, green, and retail are included. This adjustment helps alleviate funding constraints faced by small and medium service providers in expansion and upgrading, providing a more solid supply foundation for consumption recovery.

II. Equipment Renewal and Technological Transformation: Deep Integration of Fiscal Subsidies and Industrial Policies

The optimization of the equipment renewal loan interest subsidy policy is another highlight of this round of policy. In addition to continuing the interest subsidy of 1.5 percentage points for two years, the Ministry of Finance has officially included technology innovation loans under the subsidy, and significantly expanded the support scope, covering various sectors from construction and municipal works to artificial intelligence, elderly care, cold-chain facilities, and more.

China Galaxy Macro pointed out that this policy directly connects with the central bank's earlier move to increase the quota for technology innovation and technological transformation refinancing to 1.2 trillion yuan: the central bank provides low-cost funds, and the fiscal interest subsidy further reduces the actual financing costs for enterprises, helping to turn technological transformation from "possible" to "daring."

In terms of scale, Industrial Securities Macro estimates that the relevant subsidy scale for equipment renewal in 2025 is about 20-25 billion yuan, the largest among the four interest subsidy policies. This also means that equipment investment remains an important focus for fiscal and financial cooperation, reflecting the policymakers’ long-term focus on industrial upgrading and cultivating new productive forces.

III. "Two New Additions": Directly Targeting Financing Pain Points for SMEs and Private Investment

Compared with the optimization of existing policies, the two new tools are more targeted.

The first is the interest subsidy policy for small and micro enterprise loans. This policy gives an annualized interest subsidy of 1.5 percentage points, for a maximum of two years, to fixed asset loans for small, micro, and private enterprises in specific fields, with a maximum subsidized loan amount of 50 million yuan per entity. The supported scope covers key industrial chains like new energy vehicles and industrial robots, as well as productive service industries, agriculture, and emerging sectors represented by artificial intelligence.

Industrial Securities Macro noted that this policy, together with the central bank's designated 1 trillion yuan loan for private enterprises, results in "combined cost reduction" effects. Based on the 0.25 percentage point reduction in relending rates, the fiscal subsidy further cuts financing costs, and actual loan interest rates for some enterprises may approach around 2%, which will better leverage the role of small and micro private enterprises in stabilizing employment.

The second is a special guarantee program for private investment. This program totals 500 billion yuan, implemented over two years, and by raising guarantee quotas and risk-sharing ratios, it helps ease banks’ practical constraint on lending to private and small and micro enterprises.

China Galaxy Macro pointed out that improvement of guarantee mechanisms complements the central bank’s structural interest rate cuts: the former alleviates banks’ concerns about "unwillingness to lend," and the latter eases the "willingness to lend" cost constraint, jointly improving the sustainability of credit supply.

IV. The "Underlying Tone" of Fiscal Effort: Stabilization Rather Than Strong Stimulus

According to information from the Ministry of Finance press conference, the fiscal policy tone for 2026 will remain "higher aggregate amount, better structure, and increased efficiency." China Galaxy Macro expects that the narrow deficit ratio may rise somewhat, but the policy statement emphasizes fund use efficiency and structural optimization rather than simply expanding expenditures.

It should be noted that this round of policies is more characterized by structural stabilization: leveraging interest subsidies and guarantees to stimulate social financing and improve the operating environment on both supply and demand sides, rather than directly engaging in large-scale fiscal spending. While this approach reduces fiscal sustainability pressure, it also means the policy’s effectiveness depends more on the gradual recovery of business investment willingness and household consumer confidence.

In practice, some areas still face sluggish demand recovery and cautious business expectations, so policy transmission may display a "stable first, gradual later" feature. But under the continued high base pressure, early coordination of fiscal and financial policy helps provide a relatively clear downside boundary for the economy.

V. Inspiration for the Market: Bottom-line Thinking Instead of Linear Extrapolation

In summary, the five policies of January 20 do not indicate a full-scale macro policy ramp-up, but clearly send a signal: the toolbox for stabilizing growth continues to be opened, with more focus on structure and coordination.

Industrial Securities Macro noted that with the combined effect of fiscal interest subsidies, guarantee tools, and structural monetary policies, the "bottom constraint" on economic operation is being strengthened. For the market, fundamentals may still be in the process of recovery, but downside risks have been partially eased; the core function of policy is to stabilize expectations and guard the bottom line, rather than generate short-term, high-volatility scenarios.

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