China’s government has acted for the first time this year to boost economic growth after a string of disappointing data led to fears of a slowdown.The government said it will cut taxes on small firms and speed up the construction of railway lines.
The measures had previously been included in China’s economic work plan for 2014.
However, they had not before put them together in a package aimed at boosting growth.
“We will find innovative ways including fiscal and financial methods to…steady economic growth,” the cabinet said in a statement on the government’s website.
Shares in Asian stock exchanges rose after the move was announced.
Needed boost
After its weekly meeting on Wednesday, the government announced the measures, including an 18% increase in the total number of railway lines being built compared to last year. Most of those tracks will be laid in central and western regions of the country.
To finance the railway investment, the government will sell 150 billion yuan ($24.6bn; £14.5bn) worth of government bonds.
As further stimulus, Chinese authorities said they will also extend tax provisions granted to small businesses into 2016.
“We must roll out policies that spur businesses’ vitality, effectively increase demand and boost jobs,” the government said.
Last month, during the annual National People’s Congress, the Chinese government kept its annual growth target at 7.5%.
However, a string of disappointing economic data – including reports indicating a slowdown in China’s manufacturing activity – have led many analysts to believe growth may fall short of the government’s target.
Chinese Premier Li Keqiang has sought to reassure markets that the government remains prepared to act, and has previously emphasized that creating jobs – as opposed to a specific growth target – was the most important item on his agenda.
