China cuts taxes, to build more rail lines to steady economic growth

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China has acted for the first time this year to boost the economy. Beijing has announced tax cuts for small firms along with plans to speed up rail construction. Tax rates for smaller companies will be lowered by relaxing the criteria that allows them to halve their income taxes. This policy will be extended to the end of 2016, the government said. There will be an acceleration of the construction of rail projects that have been approved, and an increase in the total length of lines being laid this year by 18 percent compared to 2013. That will increase investment, which is the biggest driver of China’s economy. GDP there is rising at its slowest rate in at least a decade as the country moves from investment-driven growth to more expansion through domestic consumption. The Chinese government said recently it aims to grow the economy by around 7.5 percent this year, but some analysts believe it will fall short of that.