The reduction will make more money available for lending and support small and rural enterprises, construction projects and other activity, the central bank announced.
The amount of their deposits that China's commercial lenders will be required to hold in reserve will be reduced by at least 0.5 per cent, the People's Bank of China said. The reduction for rural banks will be bigger.
Analysts expected new stimulus measures after last year's economic growth slumped to a 24-year low of 7.4 per cent.
The People's Bank gave no indication how much additional money would be available for lending.
Much of China's slowdown over the past three years has been intentional and the result of the ruling Communist Party's efforts to nurture more self-sustaining growth based on domestic consumption instead of exports and investment.
Chinese leaders have launched a series of targeted measures to prop up individual industries through higher spending on railway construction and other projects while trying to avoid a repeat of 2008's across-the-board stimulus which relied heavily on debt.
Manufacturing weakened in January, according to surveys by HSBC Corp. and a Chinese industry group. The China Federation of Logistics and Purchasing said its purchasing managers' index fell to a 28-month low.
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