ChinaExpandsLoanSupportforTechInnovationsandEquipmentUpgrades

China has expanded a lending support program aimed at spurring technological innovations and equipment upgrades, extending its coverage to artificial intelligence (AI) and promising small tech firms.

The move marks the latest coordinated effort by the central bank and fiscal authorities to revive domestic demand and pivot the world’s second-largest economy toward a high-tech one.

The People’s Bank of China (PBOC), the National Development and Reform Commission and the Ministry of Finance jointly issued a notice on Thursday broadening the scope of the loan program designed to support technological innovations and equipment upgrades to 14 sectors, including electronic information, AI, facility agriculture and consumer commercial facilities.

Under the guidelines, financial institutions are encouraged to channel funds to private small and medium-sized enterprises with high research and development spending. The government urged banks to improve financing services for companies purchasing AI-powered equipment and software to foster the integration of the technology across industries.

The central bank initially launched a 500 billion yuan ($73 billion) relending facility for tech innovations and equipment upgrades in April 2024 with an interest rate of 1.75%. Following successive expansions and interest rate cuts in May 2025 and January 2026, the total relending facility quota reached 1.2 trillion yuan, carrying a lowered interest rate of 1.25%.

This monetary support is paired with fiscal incentives. The Ministry of Finance introduced a 1 percentage point interest rate subsidy for equipment upgrade loans in June 2024, raising it to 1.5 percentage points the following month. In January 2026, the ministry widened the interest rate subsidy’s scope to include fixed-asset loans linked to equipment upgrades and broader tech innovation lending.

Contact editor Ding Yi (yiding@caixin.com)