China will cut nearly 2 trillion yuan ($298.31 billion) in taxes and fees for companies, Chinese Premier Li Keqiang said at the National People's Congress on Tuesday. The special bond issuance quota for local governments, a key source for infrastructure investment, has been set at 2.15 trillion yuan, according to the finance ministry. Last year's quota was set at 1.35 trillion yuan. Beijing will also step up targeted cuts in the reserve requirement ratio for smaller and medium-sized banks with an aim to boost lending to small companies by large banks by more than 30 percent, said Li.
China's state planner said on Wednesday the government will implement measures to further boost domestic consumption this year.
On the trade front, U.S. Secretary of State Mike Pompeo said on Monday he thought the United States and China were "on the cusp" of a deal to end their trade war. Pompeo added on Tuesday that "Things are in a good place, but it's got to be right."
CURRENCY NEWS: China's yuan was down against the U.S. dollar on Wednesday, reflecting strength in the greenback after upbeat data eased worries about the American economy. Sentiment was also dampened by renewed worries over tensions on the Korean Peninsula on reports that North Korea is rebuilding part of a test rocket site. The yuan was quoted at 6.716 per U.S. dollar, 0.11 percent weaker than the previous close of 6.7088. In the spot market, onshore yuan opened at 6.7050 and was changing hands at 6.7160 at midday, 72 pips weaker than the previous late session close and 0.16 percent softer than the midpoint.
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