China Deploys 19 Measures to Redirect Finance to Services

Eight Chinese government departments led by the People’s Bank of China jointly issued a policy on September 28 aimed at steering more financial resources into the country’s service sector, setting out 19 practical measures to ease financing for a sprawling industry that now accounts for more than half of the national economy.

The document, formally dated September 25 and titled the Guiding Opinions on Financial Support for the Capacity Expansion and Quality Improvement of the Service Industry, targets “priority fields and weak links” of the sector, according to Xinhua News. It is the financial-support arm of a broader national strategy launched by the State Council in April 2026, which set a goal of the service sector reaching a 100 trillion yuan scale by 2030.

A Sector Too Big to Ignore

Official statistics cited by Xinhua show China’s service-sector value added surpassed 80 trillion yuan in 2025, equal to 57.7 percent of GDP — the 11th consecutive year services have made up more than half the economy. The sector contributed 61.4 percent of national economic growth, positioning it as a critical pillar for expanding domestic demand, stabilizing employment and driving economic transformation.

Yet financing has long lagged. According to the Economic Information Daily, service-sector small and medium enterprises typically display “asset-light, collateral-poor, fast-turnover” characteristics that clash with the traditional “asset-heavy, collateral-heavy, long-cycle” credit logic of banks. Intangible assets such as intellectual property, brand value and operating cash flow are difficult to convert into financing credit — described as a key bottleneck holding back the sector.

Two Main Directions of Support

The measures push financial institutions to abandon the traditional heavy-collateral lending mindset and solve the financing difficulties of asset-light enterprises. National banks are asked to independently select three to five priority directions to strengthen financial supply, while local banks focus on one or two industries suited to regional characteristics.

Support is organized along two tracks. Productive services cover technology services, modern logistics, software and information technology, energy conservation and environmental protection, and business services. Consumer and livelihood services span accommodation and catering, residential services, elderly care and childcare, and culture, sports and tourism.

What Analysts Say

Dong Ximiao, chief economist at Zhaolian and executive director of the Shanghai Finance and Development Lab, identified four highlights of the policy, according to the Economic Information Daily: a conceptual shift away from heavy-asset lending; credit innovation encouraging first-time loans, credit loans, medium- and long-term loans and intellectual-property pledge financing; expanded channels including listings, mergers and acquisitions, and the first explicit use of REITs to revitalize existing service-sector assets; and a system covering the full lifecycle of enterprises.

Yicai reported that the measures call for supporting qualified service enterprises to issue bonds and to list or restructure, while developing patient capital for long-term investment in the sector. They also encourage the use of asset securitization and REITs to unlock stable-cash-flow assets such as modern logistics, culture, tourism and elderly care.

Tian Lihui, a finance professor at Nankai University, argued that technology services should be prioritized for breakthrough, as their light-asset, long-cycle features are well suited to IP-pledge, risk compensation and direct financing tools. Elderly care, childcare and residential services, by contrast, face long payback periods and thin credit data, making them better suited to long-term cultivation.

From Subsidy to Risk Pricing

Tian said the core advantage of the multi-tier system is a shift “from subsidizing availability to building risk-pricing capability,” addressing the mismatch between asset-light service firms and collateral-heavy finance. Implementation, he said, hinges on substantiating credit profiles, proactive credit granting to first-time borrowers, and processing interest subsidies and credit simultaneously.

The policy also encourages digital RMB smart contracts for prepaid fund supervision and consumer voucher distribution, and calls for improving the financing system for early-stage, small, long-term and hard-tech investments.

What to Watch

Execution now rests with PBOC branches and financial institutions, with provincial governments already rolling out local measures since June. The policy asks PBOC provincial branches to report back on experience, typical cases and problems encountered — signaling an iterative follow-up process.

The central question is whether banks can genuinely reprice risk for borrowers who lack collateral. If the shift from lending against assets to lending against cash flow, IP and creditworthiness takes hold, it could unlock financing for millions of service SMEs. If not, the 19 measures may struggle to move the needle on a sector that is already the engine of China’s economy.