China to cut banks' reserve requirement ratios, taxes

BEIJING • China will cut banks' reserve requirement ratios (RRRs), taxes and fees, Premier Li Keqiang said yesterday, as the world's second-largest economy shows further signs of cooling.

The measures will also include targeted RRR cuts aimed at supporting small and private companies, Mr Li was quoted as saying in a statement on the website of the Chinese government.

China slashed reserve requirements four times last year to free up more funds for banks to lend and analysts expect three to four more cuts this year.

Beijing will also step up "countercyclical adjustments" of macro policies and further cut taxes and fees, Mr Li said.

He made the comments at a meeting with officials of the country's banking and insurance regulator after visiting Bank of China, Industrial and Commercial Bank of China and China Construction Bank.

China reported on Monday that factory activity shrank last month for the first time in more than two years, highlighting the challenges facing Beijing as it seeks to end a bruising trade war with Washington. The government has also ramped up spending on infrastructure to rekindle sluggish demand and investment.

The government maintains last year's economic growth will be on target at around 6.5 per cent, slowing from 6.9 per cent in 2017. But analysts see a further deceleration this year, even if a trade deal with the United States is reached.

REUTERS

A version of this article appeared in the print edition of The Straits Times on January 05, 2019, with the headline 'China to cut banks' reserve requirement ratios, taxes'. Print Edition | Subscribe