To fire up its economic engine which has appeared to be losing steam, the Chinese government has announced additional spending on railways and low-income housing, as well as tax relief for struggling small businesses, reports the Wall Street Journal.
China's State Council said the government would offer 150 billion yuan ($24.6 billion) in bonds to finance construction for the railways. The government would also spend more on slum clearance and upgrading poorer urban areas. The China Development Bank, a lender for key government policy projects, would set up a special arm to issue bonds to support new homes, according to the Journal.
The government also said it would extend existing tax breaks to small businesses until the end of 2016 and it would raise the threshold for taxing smaller businesses.
The State Council said the government needs to achieve its economic objectives for the year. The plan includes accelerated railway construction, particularly in the nation's central and western regions, and more financing. The government said that projects already been approved would be "rolled out aggressively." and that it would boost subsidies for some operations that were in the public interest.
China has set a target of economic growth of about 7.5% for this year, below the 7.7% recorded last year and well beneath the levels of recent years.
"It's very obvious that the leaders feel the need to stabilize growth," Mizuho economist Shen Jianguang told the Journal. "Overall, the 7.5% growth target means that the government still cares a lot about economic growth," he said.