A hike in tax incentives to exporters of machinery and electronic products were among measures unveiled after a meeting Wednesday of the State Council, or Cabinet, chaired by Premier Wen Jiabao, the China Daily said.

Participants in the meeting also decided to expand the list of product categories where foreign investment in processing trade is permitted, according to the paper, which provided no further details.

As part of the same package, the government will increase subsidies for farmers buying household appliances in a bid to tap the potential of the 800 million consumers living in the countryside, Xinhua news agency reported.

Other measures include money spent on boosting retail outlets in urban and rural areas, according to Xinhua.

Evidence has been piling up that China is headed for harder times as its foreign trade sector takes a direct hit from the global crisis.

The nation's exports dropped 2.2 percent in November from a year earlier, the first decline in more than seven years.

The Chinese economy, on the verge of officially becoming the world's third-largest, is likely to see growth slow to 7.5 percent in 2009, the worst performance since 1990, according to the World Bank.

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