China is offering to cover part of the interest payments on some consumer loans, in policymakers’ latest move to boost tepid household spending and counter prolonged deflationary pressures in the world’s second-largest economy.

Under the plan, led by the finance ministry, China’s government will subsidise interest rates on some consumer loans for purchases worth up to Rmb50,000 ($7,000). Individuals will receive a 1 percentage point cut on interest rates, which are normally about 3 per cent for one-year consumer loans.

The plan follows a number of policies, ranging from childcare subsidies to boost birth rates to trade-in schemes for consumer appliances, that were aimed at stimulating household demand, which has lagged amid a years-long property sector slowdown and broad slump in consumer confidence.