Beijing is preparing to inject more money into the economy, probably in excess of 130 billion yuan (HK$147.46 billion), as the mainland launches a third round of government-led investments to revive growth, sources say.
In addition, a Ministry of Commerce official yesterday said the government still had room to increase tax rebates for exporters, a move aimed at boosting exports.
The third instalment, like the previous two, will focus on infrastructure investments, which Beijing sees as the surest way to boost the economy after growth slumped to a record low of 6.1 per cent in the first quarter.
The twin moves are likely to help boost the Hong Kong and mainland stock markets.
Yesterday, the Hang Seng Index fell 2.95 per cent to 15,285.89 points, while the H-share index dropped 2.07 per cent to 9,039.09 points.
The blue-chip index has climbed 39 per cent since March 9 on hopes the worst of the global economic crisis is over and a tentative recovery is in the works.