The changes would make domestic power and metals cheaper and support agricultural product prices, achieving an effect similar to a yuan appreciation but without the potential damage to China's trade competitiveness or fragile financial system.

From Jan. 1, China raised the cost of exporting key metals and the cheapest clothing, lowered the cost of exporting corn, scrapped incentives for importing wheat and suspended import tariffs on copper, cotton and other goods from 25 African countries.

"The tariff changes allow them to cool specific sectors and limit specific exports. The results are the same as an appreciation but tariffs are a better tool," argued metals analyst Wang Qianming of China Southern Securities.

Western countries have protested that China's yuan pegged near 8.28 to the dollar since the 1997-98 Asian financial crisis is artificially undervalued, taking away millions of manufacturing jobs and swelling trade deficits.

Party officials fear a revaluation could unhinge an insular banking system burdened with $200 billion in sour loans.

A yuan appreciation would also make it more difficult to create jobs for millions of migrant workers, deputy central bank governor Li Ruogu said during the World Economic Forum in Davos.

Andy Xie, an economist with Morgan Stanley, said China had realised that instead of subsidising raw materials exports it should keep those products in China, where domestic manufacturers could use them, supporting employment.

"The Chinese government's one concern is to create jobs. Everything else is subservient."

The tariff tweaks put forward the latest example of Beijing's use of administrative steps to slow the world's seventh-largest economy before it chokes on over-capacity.

Last year, the central government ordered to banks to curb lending and restricted land use to cool red-hot growth, which nonetheless hit 9.5 per cent the fastest since 1996.

The dollar has fallen 49 per cent against the euro since the end of 2001 making Chinese exports cheaper but raising the price of metals and oil that the country buys.

Now, export-tariff changes make metals cheaper and have the added benefit of curbing the electricity-intensive processing of aluminium, which caused power shortages. Those shortages lifted manufacturing costs and forced plants to scale back output in 2004.

On Jan. 1, Beijing imposed a 5 per cent tax on aluminium exports and removed an 8 per cent tax rebate for smelters that import alumina the raw material for aluminium and export the metal. Small and inefficient smelters would be shut.

"The China government's message is that it cares about the quality of fixed-asset investment," metals industry consultant Michael Komesaroff said.

"For the same energy a smelter uses, you can employ 100 times the people in auto fabrication, or 80 times in a rolling mill."