The Chinese government has unveiled a series of measures intended to boost growth in its slowing economy.
The package of initiatives includes eliminating taxes on small businesses, lowering costs for exporters and channelling funds to the construction of railways.
China’s economy grew by 7.5 per cent year-on-year in the second quarter of 2013, down the 7.7 per cent seen in the opening three months of the year. The world’s second biggest economy has now seen growth slow for two quarters running.
A statement from the country’s cabinet says: “The economy is still running in a reasonable range. We must look at now and beyond to let restructuring and reform play an active role in stabilising growth.”
July’s Bank of America Merrill Lynch Global Fund Manager Survey showed a so-called hard landing in China is asset allocators’ biggest tail risk, with 52 per cent citing this as their largest concern – up from 32 per cent last month.
However, investors were assured earlier this week when Chinese premier Li Keqiang said the slowest growth policymakers will tolerate is 7 per cent, leading to hopes that the government was on the brink of unveiling new stimulus.
China’s cabinet says the measure are designed to “arouse the energy of the market”. However, they are much smaller in scale than the stimulus unleashed in 2008 to help the country get through the global financial crisis.