According to a notice published on the website of the People's Bank of China on September 29, in order to implement the spirit of the Central Political Bureau meeting and the arrangements of the State Council executive meeting, and to carry out an appropriately accommodative monetary policy, the People's Bank of China, on the basis of giving full play to the effectiveness of existing policies, decided to further adjust and improve several monetary policy tools, so as to create a suitable monetary and financial environment for stable economic growth, high-quality development and the stable operation of financial markets, promote the sustained and improving development of the economy toward new and better directions, and support a good start for the "15th Five-Year Plan."

The first measure is to cut the interest rate on the Pledged Supplementary Lending (PSL) by 0.25 percentage points. The one-year Pledged Supplementary Lending rate will be reduced from 1.75% to 1.5%, to better incentivize policy banks to support the real economy and serve national strategies. The second is to expand the areas supported by Pledged Supplementary Lending. The construction of the "six networks" — water networks, new-type power grids, computing power networks, next-generation communication networks, urban underground pipeline networks, and logistics networks — will be included in the areas supported by Pledged Supplementary Lending, guiding policy banks to increase financial support for the construction of the "six networks," helping expand effective investment, and deeply tapping the potential of domestic demand.

The third is to increase the quota of relending for technological innovation and technological upgrading by 200 billion yuan, and to raise the support ratio of this relending uniformly from 60% to 100%. After the increase, the quota of relending for technological innovation and technological upgrading will rise from 1.2 trillion yuan to 1.4 trillion yuan, and with a higher support ratio, this will help guide banks to increase lending to small and medium-sized technology enterprises, and better support enterprises in expanding investment in equipment renewal in key areas. The fourth is to increase the quota of relending for agriculture and small businesses by 500 billion yuan, of which the quota of relending for private enterprises will be increased by 300 billion yuan. After the increase, the quota of relending for agriculture and small businesses and rediscounting will rise from 4.35 trillion yuan to 4.85 trillion yuan, of which the quota of relending for private enterprises will increase from 1 trillion yuan to 1.3 trillion yuan, which will further incentivize local legal-person banks to increase credit support for agriculture-related and small and micro enterprises, especially small and medium-sized and micro private enterprises.

Dong Ximiao, chief economist of Zhaolian, told a reporter that cutting the Pledged Supplementary Lending rate and expanding its support scope is mainly aimed at giving play to its function as a structural monetary policy tool in providing medium- and long-term funding. Pledged Supplementary Lending is long-term funding provided by the People's Bank of China to policy banks. A 0.25 percentage point cut in the rate can directly lower the liability costs of policy banks and strengthen their ability to extend medium- and long-term credit at more favorable rates to the real economy and areas of national strategy.

It is worth noting that the monetary policy committee of the People's Bank of China explicitly proposed at its recently held third-quarter 2026 regular meeting to "strengthen financial support for key areas such as expanding domestic demand, technological innovation, small and medium-sized and micro enterprises, and the construction of the 'six networks'" and to "continue to provide financial services that support the development and growth of the private economy." Dong Ximiao believes that including the construction of the "six networks" in the areas supported by Pledged Supplementary Lending this time is in line with expectations. This will not only help stabilize infrastructure investment, expand effective investment, and tap the potential of domestic demand, but also help optimize the allocation of financial resources, support the construction of network-based infrastructure and a modern industrial system, and reflect timely and strong support from monetary policy for stabilizing growth and adjusting the structure. At the same time, increasing the quota of relending for technological innovation and technological upgrading and uniformly raising the support ratio to 100% will help better ease the problems of asymmetric risk and return and insufficient collateral in the financing of small and medium-sized technology enterprises. In addition, separately listing and increasing the quota of relending for private enterprises clearly sends a signal of support for the development of the private economy, which will help stabilize expectations and boost confidence.

"The central bank's coordinated package of monetary policy tools this round places greater emphasis on the deep integration of precise transmission and structural coordination, releasing a policy signal of fully stabilizing growth and promoting transformation," Pang Ming, a member of the China Chief Economist Forum, told a reporter. He said this series of policies takes into account both aggregate and structural aspects. By lowering costs, expanding scope, increasing quotas, and raising ratios, it guides funds toward major infrastructure construction, technological innovation and technological upgrading, and other areas, balancing stable growth, expanded domestic demand and structural adjustment, and also providing more targeted financial support for a good start to the "15th Five-Year Plan."

The People's Bank of China said it will continue, in light of macroeconomic conditions, price trends and the needs of macroeconomic regulation, to comprehensively use various monetary policy tools, keep liquidity ample, guide and regulate interest rate levels well, and serve the high-quality development of the real economy.