BEIJING (Reuters) – China halved stamp duties on stock trading from Monday, in its latest attempt to boost a battered market as recovery stalls in the world’s second-largest economy.
The Ministry of Finance said in a brief statement on Sunday that it will reduce the 0.1 percent fee on stock trading “in order to stimulate the capital market and enhance investor confidence.”
Reuters reported on Friday that the authorities plan to cut fees by up to half, after a major stock index fell to a nine-month low.
“Such a policy is likely to give a short-term boost to the market, but it won’t have much impact in the long term,” said Xie Chen, fund manager at Shanghai Jianwen Investment Management, before the announcement. “The recovery may only last two or three days, or even less.”
China’s leaders pledged late last month to reinvigorate the stock market, also the world’s second-largest, which had been reeling as flags of post-pandemic recovery and a deepening debt crisis in the real estate market emerged.
Beijing has taken a series of measures, including a smaller-than-expected cut in its main lending benchmark last week. But investors are calling for a stronger policy response, including massive government spending.
In the latest sign of economic weakness, data on Sunday showed that profits of Chinese industrial firms continued to decline this year for the seventh month, as weak demand pressured businesses.
People familiar with the matter told Reuters that regulators, including the Ministry of Finance, under the direction of the State Council, submitted a draft proposal to reduce stamp duty to the Cabinet this month.
(Reporting by Judy Hua and Joe Cash; Editing by William Mallard)