2026 China Policy: Reduced Interest on Service-Sector Loans
In January 2026, Ministry of Finance of the PRC, Ministry of Commerce of the PRC, People’s Bank of China, and the National Financial Regulatory Administration introduced an updated loan interest subsidy policy for service-sector businesses in China (关于优化实施服务业经营主体贷款贴息政策的通知).
This notice builds on an existing subsidy programme and further refines and expands its scope for 2026.
Simply put, this policy is designed to make bank loans more affordable for service-sector operating entities, encourage consumption, and support business growth.
The way it works is straightforward: the government covers part of the loan interest, so eligible businesses pay less while continuing to use standard bank financing.
Policy Validity Period
The policy is valid until 31 December 2026.
Who Is This Policy For?
This policy is intended for service-sector operating entities in China that rely on bank financing to support day-to-day operations or growth.
It is particularly relevant for:
Service sectors already covered
- Catering and accommodation
- Healthcare
- Elderly care
- Childcare
- Domestic services
- Culture and entertainment
- Tourism
- Sports
Newly added service sectors
Digital services
- Internet-based services
- Digital content businesses
Green services
- Green property management
- Green transport services, including car rental
- Green logistics, such as courier and delivery services
Retail
- All retail business categories
If your business operates in the service sector and plans to use bank loans in 2026, this policy may help reduce your financing costs.
Eligibility Criteria
Whether a business can benefit from the subsidy depends on a few practical factors, including:
- Its registered industry classification and business scope
- The intended use of loan funds
- Compliant and traceable use of funds
- Maintaining a normal loan repayment status
The policy applies to service-sector operating entities that are legally registered in China, subject to review by banks and relevant authorities.
What Support Does the Policy Offer?
For new loans issued in 2026, the subsidy works as follows:
- Up to RMB 10 million per company can qualify
- The subsidy applies for up to one year
- The government covers 1% of your annual interest
Funding is shared between:
- Central government: 90%
- Provincial government: 10%
The practical part
Businesses do not apply for cash or reimbursement.
The bank automatically applies the subsidy when charging interest and will usually notify you through your banking app or by message.
Bryan Zhang
Managing Director, Sapience Pro
A simple example
- A service company takes a RMB 5 million bank loan in 2026 at an annual interest rate of 4.5%.
- Without the subsidy, annual interest would be RMB 225,000
- With the subsidy, the government covers RMB 50,000
- The company actually pays RMB 175,000
- That is RMB 50,000 saved, with no extra paperwork for the business.
Which Banks Can Handle These Loans?
Compared with earlier policies, access is now much broader.
- Loans can be issued by:
- Major state-owned banks
- National joint-stock banks
- Strong city commercial banks
- Qualified rural commercial banks
- Eligible foreign banks operating in China
This makes it easier for businesses to work with their existing bank.
What to Watch Out For
The subsidy does not apply if:
- The loan becomes overdue or non-performing
- Funds are used for investment, wealth management, or other non-business purposes
- Banks are required to closely monitor how loan funds are used.
- Misuse can lead to the subsidy being reclaimed and future access being restricted.
If you run a service-sector business in China and plan to borrow in 2026, this policy can lower your effective interest cost by 1%, improve cash flow, and reduce financing pressure.
Sapience Pro offers expert guidance at every stage, from planning and registration to ongoing operations, making it easier for you to navigate the China market.
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