China Cuts Key Interest Rates and Offers New Mortgage Subsidies

China's new economic stimulus lowers borrowing costs for domestic mortgages and private business loans. Chinese expatriates in Copenhagen with investments or assets back home may benefit directly. The People's Bank of China announced these major policy updates on Tuesday. Starting October 1, 2026, China will implement interest subsidies for housing loans. This mortgage subsidy program will tentatively run for one full year.

The central bank also cut the one-year Pledged Supplementary Lending rate. This key policy rate dropped from 1.75 percent to 1.5 percent. The rate cut aims to encourage policy banks to fund major domestic infrastructure. Supported projects include water networks, power grids, and underground pipeline systems.

In addition, the central bank expanded its targeted relending quotas for key sectors. The sci-tech innovation relending quota rose by 200 billion yuan. This quota now totals 1.4 trillion yuan for small technology firms. Another 500 billion yuan quota will support agriculture and small businesses. Private companies receive 300 billion yuan from this new allocation. That brings the total private enterprise relending quota to 1.3 trillion yuan.

China set its annual growth target at 4.5 to 5 percent for 2026. In the first half of 2026, gross domestic product grew by 4.7 percent. Premier Li Qiang chaired a State Council meeting on Monday regarding these goals. The meeting urged stronger macro policies to promote effective investment and expand domestic demand. This news was originally reported by the People's Bank of China website.