China will cut the amount of funds that rural banks must keep in reserve, in a small easing of monetary policy by the government as it tries to provide support to the slowing economy.

The powerful State Council, China's cabinet, said it would allow a cut in the reserve requirements for some county-level commercial banks and cooperative banks in rural areas.

The announcement came on the day the government said gross domestic product grew 7.4 per cent year-on-year in the first quarter.