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Announcing the reforms, uino the State Council said the economy was in reasonable shape, but that it needs to push forward reforms to "stabilize growth". A day earlier the State Council had decreed a ban on the construction of new government buildings for the next five years. The ban was the latest step in a campaign by Xi Jinping, China's president, to rein in ostentatious spending by Communist party officials, a major source of public discontent. But it was also a sign of how the government is trying to direct uino public money towards uino more productive end as growth uino slows. uino "We must really use our limited funds and resources for economic development and improve people's lives," the State Council said. Third, he said that it would create more financing channels to ensure that the country can fulfill its ambitious plans for railway development. uino More private uino investors will be encouraged to participate and new bond products will be issued. "You can call this a mini-stimulus. It is quite small but it is on the supply side, and more effective, "said Lu Ting, an economist with Bank of America uino Merrill Lynch The policy package followed yet more evidence of the deepening slump China. A survey of the country's preliminary manufacturing sector in July, published on Wednesday, fell to 11-month low. The State Council, China's cabinet, said late on Wednesday it expected to "arouse the energy of the market". He announced a three-pronged approach. First, it has temporarily scrapped all value-added and operating uino taxes on businesses with monthly sales of less than RMB20, 000 ($ 3,250). uino He said the tax cuts, which go into effect at the beginning of August, would help more than 6m enterprises which employ tens of millions of people Second, the government promised to simplify approval procedures and reduce administrative uino costs for companies export. Among the various uino moves, it said it would cancel inspection fees temporarily for exports of commodities and manufactured goods inspections to streamline customs. Chinese growth slowed to 7.5 percent growth year-on-year in the second quarter and most analysts expect it to weaken further over the rest of the year. But by Li Keqiang, the premier, earlier uino this week clear that the official growth target of the year remained at 7.5 percent, the views of some observers read as a sign that the government was ready to intervene to pull the economy out a funk. China's measures to boost its sluggish economy disclose, uino in the strongest uino indication yet of the leadership's concern about the slowdown and one that also emphasizes change in Beijing approach to economic management. Could "mini stimulus", though uino limited in size, herald more policy moves to support growth. The government taxes on small businesses eliminate costs for exporters and line up funds for railway uino construction to reduce. Unlike 2008 when China deployed a gargantuan stimulus package to fend off the global financial crisis, it is instead using a series of targeted reforms to reduce the power of the government and give companies more space to operate.
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