YEREVAN. – Cutting taxes along with policy rates could add up to the stimulus in Chinese economy, Mr David Dollar, an expert on China with the John L. Thornton China center at the Brookings Institution (US-based think tank) told Armenian News - NEWS.am, commenting on the recent policy move by the People’s Bank of China, announced on 25 August.

According to him, cutting rates on one-year loans and deposits, as well as reserve requirements for banks, will prove a modest stimulus per se, but it could be augmented by fiscal pushes (tax cuts, healthcare and education spending), as well as structural reforms, he added.

Other measures which may come in handy include opening the services market to international investors, as well as relaxing the household registration system (hukou), he added.

Hukou policy has long been one of the factors of a low share of labor in the value of Chinese products, restricting migration from villages to cities and allowing for inexpensive rural workforce.

Chinese demand has become one of the key factors for Armenia’s mining and metal exports revenues over the years.

The news of China’s new round of relaxing monetary policy initially tilted metal prices upwards in hopes for a resurgence of industrial demand in China. But that did not translate into a constant trend, as official manufacturing Purchasing Managers' Index of China declined to 49.7 in August, down from 50.0 in July.