Financial Support Unleashes Consumer Potential, Precise Policies Release Domestic Demand Vitality

Staff Reporter Liu Meng

On March 16, the Party Committee of the National Financial Regulatory Administration held an expanded meeting and proposed to “guide financial institutions to actively support the special campaign to boost consumption.”

This year’s Government Work Report lists “building a strong domestic market” as the top task for 2026, clearly stating to “deeply implement the special campaign to boost consumption,” “allocate 250 billion yuan in ultra-long-term special government bonds to support the replacement of old consumer goods,” and “set up 100 billion yuan in fiscal and financial coordination funds to promote domestic demand, using a combination of loan interest subsidies, financing guarantees, and risk compensation to support expanding domestic demand,” among other measures.

Previously, the 2026 regulatory work conference held by the National Financial Regulatory Administration also emphasized strengthening financial support to promote consumption and expand investment, efficiently serving the strategy to expand domestic demand.

Ming Ming, Chief Economist at CITIC Securities, told Securities Daily that regulatory authorities are pushing financial institutions to focus on precise efforts from the supply side, through innovative financial products and service models to inject vitality into the consumer market. They also guide financial resources to efficiently connect with key areas such as old-for-new exchanges, aiming to create a fiscal-financial synergy, stimulate consumption potential, and solidify the foundation for economic recovery and growth.

“Against the backdrop of increased external uncertainties, expanding domestic demand has become a key support for stabilizing growth. Policy tools are expected to become more systematic and precise,” said Lou Feipeng, a researcher at Postal Savings Bank of China, in an interview with Securities Daily.

Currently, financial institutions are actively responding to the national deployment of boosting consumption through a series of policy “combination punches” and financial innovations. They are working on reducing residents’ credit costs, enriching consumer finance products, and supporting consumer supply entities, comprehensively aiding the expansion of domestic demand and the construction of a strong domestic market.

At the Fourth Session of the 14th National People’s Congress, Blue Fongan, Minister of Finance, stated at a press conference on the economic theme: “This year, the central government has specifically allocated 100 billion yuan to launch a package of six policies for fiscal-financial coordination to promote domestic demand, including four targeted support measures for private investment and two for residents’ consumption.” “The finance department will build mechanisms and allocate funds, while financial institutions will provide liquidity. The Ministry of Industry and Information Technology and other departments will propose project lists, forming a transmission chain of fiscal guidance, financial amplification, and market operation to mobilize larger social resources toward key areas for expanding domestic demand.”

According to Blue Fongan, the implementation over the past two months has shown a good overall trend of increased volume, expanded coverage, and decreased prices in related credit issuance. Data from financial institutions indicate that from January to February, the two policies to promote consumption jointly issued 5.1 trillion yuan in new loans to service industry operators and individual consumers, a year-on-year increase of 7%.

Regarding the next steps for financial support to boost consumption, Ming Ming believes that guiding financial institutions to focus on key areas such as old-for-new consumer goods, innovating consumer credit and installment financial products, and improving service convenience are essential. Additionally, efficiently connecting with fiscal-financial coordination funds, using tools like interest subsidies and guarantees to lower entry barriers and financing costs, and increasing credit support for retail, cultural tourism, and new energy vehicle scenarios will form a policy synergy to effectively stimulate residents’ willingness and potential to consume.

Fu Yifu, a special researcher at the Shanghai Commercial Bank, stated that the main directions for future financial support to boost consumption include: first, focusing on key categories such as automobiles, home appliances, and smart digital products for old-for-new exchanges, with a tilt toward green and smart products; second, deepening support for service consumption by increasing financial support for cultural tourism, elderly care, childcare, health, and sports; third, expanding inclusive financial services in lower-tier markets and for new urban residents, reducing financing and credit costs.

Lou Feipeng noted that during this process, financial institutions need to strengthen risk prevention, avoid excessive leverage, refine services to match different income groups, and enhance regulatory coordination to prevent disorderly competition.

Looking ahead, Lou Feipeng believes that active support from financial institutions for the special campaign to boost consumption will help promote a consumption recovery. Specifically, old-for-new exchanges will drive the rebound in durable goods consumption, scene innovation will boost the share of service consumption, and sinking markets will become new growth points. However, improving residents’ confidence and income expectations will take time, and external uncertainties will affect transmission efficiency. Achieving fundamental changes still requires deepening reforms and adjusting income distribution.

Fu Yifu predicts that as various measures take effect, consumer financial products will become more diverse and reasonably priced, with residents’ willingness and capacity to consume steadily increasing. It is expected that the fundamental role of consumption in economic growth will continue to be consolidated, providing solid support for the start of the 14th Five-Year Plan.