Chinese authorities have announced a new package of measures aimed at supporting economic growth and reviving the country’s struggling property sector as pressure mounts ahead of the 2026 year-end growth target.
The measures, announced Tuesday, include lower funding costs for policy banks, increased lending support for technological innovation and new mortgage interest subsidies for eligible homebuyers.
The People’s Bank of China (PBOC) said it would cut the one-year interest rate on its pledged supplementary lending (PSL) facility by 0.25 percentage points to 1.5%.
PSL provides low-cost financing to China’s major state policy banks for state and public projects. The central bank said the rate reduction is intended to improve incentives for banks and better support national strategies.
The PBOC also announced a 200 billion yuan increase in its relending quota for technological innovation, taking the total to 1.4 trillion yuan.
China Offers Mortgage Support to Homebuyers
China’s Ministry of Finance separately announced new mortgage interest subsidies for homebuyers.
Starting in October, eligible first-time buyers will receive subsidies equivalent to an annualised 1 percentage point of their mortgage principal for up to five years.
The subsidy will apply to homes measuring no more than 120 square metres, with a purchase price capped at 1.5 million yuan.
Gary Ng, a senior economist for Asia-Pacific at French bank Natixis, described the measures as a targeted effort to reduce funding costs and support selected sectors, including real estate.
He said the property measures were aimed at strengthening housing demand in lower-tier Chinese cities, where the sector continues to face significant pressure.
China Faces Growth Pressure
Chinese leaders have set a 2026 economic growth target of between 4.5% and 5%, compared with 5% growth recorded last year.
The economy expanded by 4.3% in the April-June quarter, according to the report, marking its weakest growth pace in more than three years.
China’s property market has also remained under pressure following a prolonged liquidity crisis in the real estate sector after authorities moved to curb excessive borrowing.
Overall home prices have fallen by roughly 20% or more compared with 2021, according to the report.
Ng said Tuesday’s measures were likely intended to help China achieve the lower end of its annual growth target.
The announcements came a day after China’s State Council discussed strengthening and improving the effectiveness of macroeconomic policies in response to continuing economic challenges.
