China's loan interest subsidy to effectively stimulate domestic consumption: experts

China's loan interest subsidy plans targeting personal consumption and service-sector businesses will effectively promote consumption and expand domestic demand, according to experts from the country's leading financial services institutions.

China's Ministry of Finance said on Tuesday that eight categories of eligible service sector businesses will benefit from a new loan interest subsidy policy action plan.

The action plan targets service sector businesses in the categories of catering and accommodation, health care, elderly care, childcare, housekeeping, culture and entertainment, tourism and sports.

China will also provide interest subsidies for qualifying personal consumption loans. Individuals may receive interest subsidies on portions of personal consumption loans issued by lending institutions, according to the ministry.

"The loan interest subsidies for consumption in key sectors provide real financial support to residents' consumption. The policies will help expand domestic demand and smooth the internal circulation of the economy," said Wang Yifeng, deputy director of Research Institute at Everbright Securities.

"The policy will be implemented through the approach of subsidy first, loan later. The annual subsidy rate of 1 percentage point is roughly one-third of the current commercial bank personal loan interest rate. With the subsidy, qualified individuals can get the loans with the interest rate below 3 percent. That's equivalent to a 30 percent discount on the loan interest rate, which will significantly reduce people's loan costs, enhance the stability of consumer credit demand and effectively alleviate the burden on residents," Wang said.

Coordinating with other policies such as the consumer goods trade-in programs, the subsidies will effectively boost China's domestic circulation by stimulating the domestic consumption, experts said.

"The current monetary policies and fiscal policies have formed a superimposed effect, giving full play to the policy effect. That will forcefully and effectively promote consumption, stabilize employment and expand domestic demand," said Dong Ximiao, principal investigator of Merchants Union Consumer Finance Company.

China's loan interest subsidy to effectively stimulate domestic consumption: experts

Solly Mapaila, general secretary of the South African Communist Party (SACP), criticized some countries jeopardizing the international rule-based system with wars, violence and sanctions as he elaborated on challenges multilateralism faces and Global South cooperation in a recent interview with China Global Television Network (CGTN) in Beijing.

Mapaila called these countries' unilateral actions "disruptive" to international order.

"The changing nature of the strategic relations, if you like, the world balance of forces, that the capitalist world has practically devoured and are destroying international rule-based system. They are destroying international law. They arrogated to themselves the leaders of the world. They are trying to impose their ideas as universal ideas, and in the context of an emerging multipolar world largely and centered around China and to an extent as well the Russian Federation, they found it difficult to allow this to happen and they become disruptive. That's why they have launched wars, violence, sanctions, interference in countries' internal affairs, interference in security threats and everything else," he said.

Against uncertainties posed by unilateralism, Mapaila highlighted the importance for the Global South to show solidarity like they have at the Bandung Conference in Indonesia and the Tricontinental Conference in Cuba.

"Now, the Global South has a necessity to relive the moment of Bandung in which the South came together to struggle and to consolidate their solidarity against colonialism. This conference took place in Indonesia, and later on the Tricontinental Conference that took place in Cuba, which we are celebrating [the 60th anniversary now], in 1966, where Africa, Asia and Middle East, Latin America came together to discuss the challenges of colonialism and how to come out and support one another so that solidarity is important today," he said.

Mapaila led a delegation of South African politicians to visit China in March, where the two sides discussed deepening ties and exchanged views on international and regional issues of common interest.

Wars, sanctions destroying international law: SACP general secretary