China unveils more steps to spur investment as economy sags

China's cabinet announced more steps on Thursday to spur investment, state media said, extending a raft of measures to bolster the COVID-ravaged economy.

Authorities will boost investment, offering incentives to companies to encourage equipment purchases and upgrades, and cutting taxes for firms to support innovation, the cabinet was quoted as saying after a regular meeting.

Chinese policymakers signalled a renewed sense of urgency on Monday over steps to shore up the flagging economy, saying this quarter was a critical time for policy action as evidence points to a further loss of economic momentum.


Over 50 policy measures have been issued since late May.

The central government will provide interest subsidies of 2.5 percentage points on loans for equipment purchases and upgrades by universities, hospitals, new infrastructure projects and small firms, the cabinet was quoted as saying.

More tax incentives will be given to high-tech firms that purchase and upgrade equipment, the cabinet said.

Local governments will complete selling over 500 billion yuan in special bonds under carryover quotas from 2019 by the end of October, the cabinet said.

Such bonds, on top of the annual quota of 3.65 trillion yuan, will help fund infrastructure projects.

The cabinet also unveiled some steps to boost employment, including using special loans to support platform companies and expanding unemployment insurance payments for jobless youth.

As the Chinese economy struggles to recover from a COVID-induced slump, the youth unemployment rate has surged to a record high of 19.9% in July.