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China introduces measures to boost economic growth

2014-04-03 05:32:56

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.