China will work to ease the financing strain and high funding costs of small companies amid continued efforts to cut costs in the real economy, the State Council decided at an executive meeting chaired by Premier Li Keqiang on Wednesday.

The State Council pledged such measures as using targeted cuts in banks' reserve requirement ratios, raising rediscount quotas and cutting relending rates to channel more loans to small firms and reduce their funding costs.

Interest income from credit up to 5 million yuan (0.77 million US dollars) for eligible small firms and households will be exempt from value-added taxes starting Sept. 1 until the end of 2020. Loans for small firms with a credit line of 5 million yuan or less will be included in collateral for the central bank's medium-term lending facility. 

The country will maintain the prudent and neutral monetary policy, keep liquidity at a reasonable and ample level, maintain financial stability, enhance overall coordination of policies to consolidate the momentum of stable and sound economic growth, boost market confidence, achieve relatively full employment and ensure the economy runs within a reasonable range, according to a statement issued after the meeting.

The meeting also decided to speed up the approval process for new medicines, enforce measures to lower cancer drug prices, and address the shortage of certain drugs.