China cuts lending rate, adds homebuyer subsidies

On Tuesday the People's Bank of China announced a financing package cutting the one-year pledged supplementary lending rate by 25 basis points to 1.5% and adding homebuyer aid. A joint notice by the Ministry of Finance, the PBoC and the National Financial Regulatory Administration sets a nationwide 1 percentage point annual mortgage interest subsidy for first-time homebuyers for up to five years, capped at Rmb1 million principal per household. Eligible homes are 120 square metres or less and valued up to Rmb1.5 million. The policy takes effect Oct. 1, 2026, for a tentative one-year period. The steps follow a Monday cabinet meeting chaired by Premier Li Qiang that agreed to intensify countercyclical macro policy. The PBoC expanded PSL to water systems, power grids, computing, communications, urban pipelines and logistics, and raised relending quotas for equipment and sci-tech by Rmb200 billion to Rmb1.4 trillion, for agriculture and small businesses by Rmb500 billion to Rmb4.85 trillion, and for private companies by Rmb300 billion to Rmb1.3 trillion. Q2 GDP growth was 4.3%, below the 4.5-5% full-year target. Contested facts: none identified. Rated left coverage: none.