managing partner of Progetto CMR (Beijing) Architectural Design Consultants

Massimo Bagnasco, managing partner of Progetto CMR (Beijing) Architectural Design Consultants, part of a leading Italian architectural company, said the reductions would provide a boost.

"It is definitely a positive action which will support small businesses," he said, adding that the VAT reduction would definitely help some companies.

Bagnasco said foreign companies in particular want to see improvements in other aspects of the business environment in China, not just tax cuts.

"One of the key issues for small and medium-sized enterprises, especially foreign ones, is better access to financing. Another major issue is ensuring reasonable payment terms. There is currently no consolidated legislation in China on late payment, which would alleviate many cash flow burdens SMEs have in China," he added.

Edward Tse, founder and CEO of management consultancy Gao Feng Advisory, said the cut in VAT in particular would ease the pressures on small businesses.

"It is a highly welcome policy change. It has to be seen as a very good signal from the government. The corporate sector has been making the case for many years that taxes should be substantially reduced, and the government has now responded," he said.

"Companies will either use the money they save to pay dividends or reinvest in their business, some of which will be in research and development, which can only be positive for the economy."

Charles-Edouard Bouee, CEO of management consultancy Roland Berger, also believes the tax cuts will ease some of the financial pressures that small businesses in China have been facing.

"I think they are significant and this is a good effort by the government," he said.

Bouee, who has written extensively about the Chinese economy, said that regardless of tax cuts, the country's private sector is now one of the most vibrant in the world.

"It is much more entrepreneurial than Europe and is much more similar to that in the United States. The world has changed a lot in the past 10 years, and what Chinese businesses have been able to do, whether they are in the tech sector or not, is adapt to new technology," he said.

Zhu Ning, deputy dean at the National Institute of Financial Research at Tsinghua University, said the tax cuts are addressing the slump in business confidence at the end of last year.

"Many companies - particularly export-oriented manufacturing businesses in Zhejiang province - found they were not making enough profit, and some of them closed down. This sector suddenly lost the confidence it had built up over decades," he said.

"The tax cuts represent a new incentive and I expect we are going to see this policy continue with cuts targeting new sectors such as artificial intelligence and high-end manufacturing."

For Shu, at Continental Interior Design and Construction, the cuts show the government is unequivocally on the side of small businesses.

"I am encouraged by the care and attention the Party and the government is offering the private sector. It only enhances my passion and confidence in running a business and developing innovation for the good of the nation," he said.

"Our company and myself, as an individual, are confident and willing to contribute to the great journey of this new era."