China broadens efforts to support trade

BEIJING, July 24

China will cut some import taxes and liberalise yuan trading as part of broad efforts to support its trade sector, the Cabinet said on Friday, as the economy struggles to gain momentum.

Hurt by anaemic foreign and domestic demand, China’s imports in June fell for the eighth consecutive month and exports rose for the first time in four months, further dragging on an already stuttering economy.

China will widen two-way fluctuation in the yuan exchange rate and study introduction of products to help firms mitigate foreign exchange risks, the State Council said without elaborating in a statement on its website.

The recent appreciation of the yuan has lowered the competitiveness of Chinese exporters, who are already struggling with tepid external demand.

Import taxes on some daily necessities will also be cut as part of a pilot programme while cheap loans will be provided to more importers, it said.

The government will also speed up the process of paying export rebates and encourage banks to expand credit support for high-performing firms to venture abroad, the Cabinet added.

The Cabinet said last week that China planned to give more of its importers subsidised loans to help support the trade sector.

China’s yuan — which tracks the dollar — has hit new highs this year against various currencies, including the euro, on the back of a stronger US currency.