The mainland acted for the first time this year to steady its stumbling economy by cutting taxes for small firms yesterday and announcing plans to speed up the construction of railway lines. The State Council said after its weekly meeting it would accelerate the construction of rail projects that had been approved, and increase the length of lines being laid this year by 18 per cent compared with last year. It also said the central government would lower tax rates for smaller companies by relaxing the criteria that allow them to halve their income taxes, with the policy to be extended to the end of 2016. The measures mark the first concrete action being taken by the central government this year to boost its economy, and come after Premier Li Keqiang last week sought to reassure jittery markets that Beijing was ready to provide support. Two surveys of the vast manufacturing sector this week showed factories faced persistent headwinds last month, raising fears the economy may be cooling much faster than thought. "We will find innovative ways including fiscal and financial methods to … steady economic growth," the State Council said. The central government said last month it was targeting economic growth of about 7.5 per cent this year. Increased construction of railway lines will foster investment, the biggest driver of the economy, which has been rising at its slowest rate in at least a decade as the mainland moves towards consumption-driven growth. The railway investment would be partly financed by bank loans, the State Council said. The authorities will also create an annual fund of 200 billion yuan (HK$250 billion) to 300 billion yuan each year that will be open to private investors. For this year, the central government will sell 150 billion yuan of bonds to pay for more than 6,600 kilometres of new railway track.