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China finance minister targets fiscal policy, infrastructure to support economy

A laborer works at a construction site of an amusement park next to new property buildings in Hefei, Anhui province, on Aug 1, 2015.

[SHANGHAI] China will strengthen fiscal policy, boost infrastructure spending and speed up reform of its tax system to support the economy, the Ministry of Finance said, joining other steps by authorities to re-energise sputtering growth.

The ministry will accelerate major construction projects, bring in private financing through increased use of the public private partnership (PPP) model, standardize the management of local government debt and reform taxes, it said in a statement late on Tuesday.

Chinese policymakers have stepped up efforts to revive an economy growing at its slowest pace in decades, with a 40 percent plunge in mainland stock markets since mid-June roiling global financial markets.

On Tuesday, data showed China's imports tumbled in August, raising concerns about the health of the world's second-largest economy and its contribution to global growth. "We will accelerate the implementation and improvement of proactive fiscal policy and related measures, do timely fine tuning, and speed up reform measures to support stable growth and promote continued healthy economic development," the finance ministry statement said.

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Government departments have joined Beijing's efforts to support the economy. The National Development and Reform Commission (NDRC) approved two railway projects on Tuesday with a total value of nearly 70 billion yuan (S$15.6 billion), the latest move to support infrastructure projects to boost growth.

The People's Bank of China (PBOC), the central bank, has also conducted a slew of monetary easing measures since the end of last year, cutting interest rates several times and banks'required reserve ratios (RRR).