China cuts power prices and taxes to help firms amid slowdown

China will cut some electricity prices and natural resource taxes to help companies amid the economic slowdown, the government has announced.

The State Council said after its meeting on Wednesday that the price of electricity supplied to the grid by its many coal-fired power plants would be cut by an average of 0.02 yuan (2 HK cents) per kilowatt-hour.

Although overall household prices remained unchanged, the government said it would also cut the sales price for power supplied to commercial enterprises by 0.018 yuan per kWh.

China will continue its differential power pricing policy that charges more for high energy-consuming sectors and also increase the use of "punitive" prices imposed on firms that violate state regulations on pollution and resource use.

The measure would "reduce companies' costs, stabilise market expectation, promote economic growth, and help the restructuring of the industries in a differentiated manner", according to the State Council's post-meeting statement.

It added that it would review and slash unreasonable government charges for businesses to support the economy.