A set of pragmatic and effective incremental policies has officially been implemented. On September 29, the central bank announced a decision to further adjust and refine several monetary policy tools: from cutting the PSL interest rate to including the "six major networks" in the supported areas, from raising both the quota and the support ratio of the relending facility for scientific and technological innovation and technological upgrading, to increasing the relending quota for agriculture and small businesses by 500 billion yuan. These four measures launched in unison are aimed at driving the economy toward sustained, better, and more positive development.
Just one day earlier, the State Council executive meeting explicitly proposed "introducing a set of pragmatic and effective incremental policies" and required "comprehensively utilizing and timely adjusting monetary policy tools, and increasing relending quotas for scientific and technological innovation and technological upgrading, agriculture support, and small business support." In fact, the market had already formed certain expectations for the optimization and adjustment of structural monetary policy tools. The phrase "comprehensively utilizing and timely adjusting monetary policy tools" was first proposed at the July 2026 Central Politburo meeting, and was subsequently implemented through the central bank's second-half work conference, and cited in the second-quarter monetary policy execution report and the third-quarter monetary policy meeting. The market had widely regarded this phrase as an important guideline for second-half monetary policy, but there had been no clear signal on when the tools would be implemented or in what form they would be introduced. With the central bank's official announcement of the "four measures launched in unison" for structural monetary policy tools, the policy implementation path has now been clarified.
The first measure is the PSL interest rate cut. The one-year pledged supplementary lending rate was lowered from 1.75% to 1.5%, a reduction of 0.25 percentage points, to better incentivize policy banks to support the real economy and serve national strategies. PSL represents funds provided by the central bank to policy banks with longer maturities and lower costs, mainly serving key areas and weak links of the national economy, and is an important tool for guiding targeted credit delivery.
The second measure is the expansion of PSL-supported areas. The construction of the "six major networks" — water networks, new-type power grids, computing power networks, next-generation communication networks, urban underground pipeline networks, and logistics networks — has been formally included in PSL-supported areas. Credit extension by policy banks to these areas will receive longer-term and more stable funding support. This also represents the formal follow-up by structural monetary policy tools after the central bank's Monetary Policy Committee included the "six major networks" in key financial support areas at its third-quarter meeting.
The third measure is the relending facility for scientific and technological innovation and technological upgrading receiving both a quota increase and a support ratio increase. The relending quota was increased by 200 billion yuan, and the support ratio was uniformly raised from 60% to 100%. After the adjustment, the quota for this relending facility increased from 1.2 trillion yuan to 1.4 trillion yuan, with a higher support ratio, which will help guide banks to increase lending to small and medium-sized technology enterprises and better support enterprises in expanding investment in equipment upgrading in key areas.
The fourth measure is increasing the relending quota for agriculture support and small business support by 500 billion yuan, of which the relending quota for private enterprises was increased by 300 billion yuan. After the adjustment, the relending and rediscounting quota for agriculture support and small business support increased from 4.35 trillion yuan to 4.85 trillion yuan, with the relending quota for private enterprises rising from 1 trillion yuan to 1.3 trillion yuan. This will further incentivize local legal-person banks to increase credit support for agriculture-related and micro and small enterprises, especially small and medium-sized private enterprises.
Dong Ximiao, chief economist at Zhaolian and executive director of the Shanghai Finance and Development Laboratory, told reporters that this adjustment sends a signal that monetary policy is focusing on structural precision and efficiency improvement of existing resources. On the one hand, through targeted interest rate cuts, area expansion, and quota increases of structural tools, financial resources will be precisely channeled into key areas such as the "six major networks," scientific and technological innovation, equipment upgrading, "agriculture, rural areas, and farmers," small and micro enterprises, and the private economy. On the other hand, this adjustment balances stable growth with promoting transformation. The increased quota and higher support ratio for the relending facility for scientific and technological innovation and technological upgrading will guide more credit to flow to small and medium-sized technology enterprises and equipment upgrading areas, which will both help expand effective investment and build momentum for industrial upgrading. Overall, this is a combined arrangement featuring restrained aggregate measures, precise structural targeting, and directed efforts.
Regarding the monetary policy approach for the next stage, the central bank also stated that it will continue to comprehensively utilize various monetary policy tools based on macroeconomic conditions, price trends, and macroeconomic regulation needs, maintain ample liquidity, guide and regulate interest rate levels well, and serve the high-quality development of the real economy.