BEIJING, (Reuters) – China’s Cabinet announced Wednesday that it will delay some taxes for manufacturers for three months starting in November because of rising raw material prices. This was according to state television.

China Central Television reported that the State Council said after meeting presided over by Premier Li Keqiang, the tax deferral amount to around 200 billion Yuan for small firms within the manufacturing sector.

The meeting also stated that the government would allow heating and coal firms to delay their taxes payments, which are estimated to be about 17 billion Yuan, in the fourth quarter to ease their operational problems.

China’s unexpectedly low factory activity in September was due to an increase in input costs and a shortage of power. These factors added to the economic headwinds faced by China, which includes curbs on property rights and technological sector restrictions.

China’s GDP grew by 4.9% from the previous year, which is the slowest rate since 2020’s third quarter. It has prompted policymakers to introduce more support measures in order to maintain a weak economy.

According to the State Council, more tax-reduction policies will be studied by the government for market entities. The next step will also see the increase in fine-tuning macro policies and preemptive adjustments, it was announced.

The meeting also stated that China would extend tax exemptions on foreign bond interest until 2025.