The stimulus package includes tax breaks for small businesses, reduced fees for exporters and opening up of railway construction.

The targeted reforms are expected to reduce state interference and allow companies more freedom to operate.

China’s cabinet said it wanted to “arouse the energy of the market”.

The tax cut for small businesses takes the form of the scrapping of VAT for companies with monthly sales of less than £2,100.

The government is also temporarily cancelling inspection fees for commodities exports and simplifying customs inspections for manufacturers.

Economic data released earlier this month showed a slowdown in Chinese growth. The figure in April to June stood at 7.5%, against 7.7% in January to April, leading to fears the country had been hit by stagnating exports.