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The sprawling southwestern Chinese city of Chongqing has introduced more measures to bolster the real economy amid growing pressure from Beijing to step up support for the country's private sector as economic growth slows. The city has announced 18 policy measures to further enhance the healthy development of enterprises in the real economy, and will provide more fiscal and financial support, lower corporate costs and make it easier for firms to do business, the official Chongqing Daily reported on Saturday.

Chongqing will set up a relief fund of at least 10 billion yuan ($1.46 billion) to help private firms suffering from temporary liquidity problems, the newspaper added. Other provinces and regions have also sought to provide more support for the private sector, with the world's second-largest economy losing momentum aggravated by an ongoing trade dispute with the United States.

The northeast rustbelt province of Liaoning also introduced 16 measures to help revitalise private firms, and pledged to implement tax cuts, the official Xinhua news agency reported on Saturday.

China's factory activity contracted for the first time in more than two years in December, highlighting the challenges facing Beijing as it seeks to end tit-for-tat trade tariffs with Washington and reduce the risk of a sharper economic slowdown. In efforts to boost liquidity in the economy, China's central bank said on Friday it was cutting the amount of cash that banks have to hold as reserves for the fifth time in a year.

Copyright Reuters, 2019

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