China's expanded interest subsidy will not lift retail sales above 1.5% year-on-year through year end.

July's print of just 0.6% growth already missed the 1.5% consensus forecast, despite months of trade-in rebates and cheaper borrowing costs, because new consumer loans make up only about 2.9% of total retail sales. With households holding an estimated 32.6% savings rate and still paying down property debt, a further rate cut on credit card instalments and small business loans is unlikely to move the aggregate number, and expect further expansion of interest subsidies.