The tax on personal bank savings interest has been lowered from 20 to five percent as of today, according to a report from hexun.com.

The tax was introduced in November 1999 to encourage domestic consumption.Meanwhile, banks' reserve requirement ratio was raised by 0.5 percentage points, also effective today, meaning that about 160 billion yuan in bank capital will be frozen.

This marks the sixth time the central bank has raised the reserve requirement ratio this year. The ratio will reach 12 percent for big lenders after the adjustment.

To slow down the economy and control bank loans, the central bank has also raised interest rates three times this year.

Although a series of tightening measures were unveiled, China's gross domestic product was 11.5 percent higher in the first half than the same period of last year, half a percentage point up from the 2006 first-half rise, and fixed assets investment soared 25.9 percent, according to statistics from the National Bureau of Statistics.