China’s central bank and five other government departments today jointly issued “Guiding Opinions on Financial Support for Boosting and Expanding Consumption.” The guidelines encourage financial institutions to actively develop their auto loan businesses and to appropriately reduce or waive penalties for early loan settlements that occur during vehicle trade-in processes.
The document calls for innovating and optimizing credit products while maintaining risk control. It advocates for increased support for first-time loans, loan renewals, credit loans, and medium- to long-term loans for eligible businesses in the consumer sector to meet diverse financial needs.
Key points from the guidelines include:
- Expanding Auto Loans: Financial institutions are encouraged to actively conduct auto loan business, reasonably determine loan amounts, terms, and interest rates based on the borrower’s credit level and repayment ability.
- Supporting Trade-ins: The guidelines specifically call for appropriately reducing or waiving prepayment penalties on loans settled early during a vehicle trade-in. They also push for greater credit support for businesses involved in vehicle scrapping and recycling, used appliance recycling, and home/kitchen renovations.
- Green and Smart Appliances: Financial support for the production and consumption of green and smart home appliances should be strengthened, with optimized approval processes.
- Improving Financial Services: The document promotes the integration of internet and big data technologies with consumer finance to streamline online credit applications, approvals, and disbursement processes.
- Bond Issuance: Support will be given to eligible companies in the cultural, tourism, and education sectors to issue bonds.
- Optimizing Payment Services: A continued push to improve payment convenience across key consumption scenarios like dining, accommodation, travel, and shopping. This includes enhancing the compatibility of cash, bank cards, mobile payments, and the digital yuan to meet the needs of various groups, including the elderly and foreign visitors.
The guidelines also encourage financial support for commercial and logistics infrastructure, such as logistics hubs, cold chain bases, and rural commercial centers, to reduce overall logistics costs and final consumer prices.