In a move to bolster a slumping economy, the People's Bank of China (PBOC) cut reserve requirement ratio (RRR) for the fifth time in a year. This time, PBOC has slashed the ratio by 50 bps to 17% for all banks effective March 1, suggesting that they are required to hold fewer reserves. The excess capital will flow into the economy.

The PBOC clarified that it cut the rate "in order to maintain adequate liquidity" and support "steady and moderate growth of money and credit.” The move came after the Shanghai Composite Index sank to the lowest level since 2014 and the currency yuan weakened for the seventh day representing the longest stretch of decline since December.

The cut helped the Chinese stock market to trim some of the losses made on the day. It also swept away the negative sentiments from the lack of action to step up global growth in the G-20 meet of finance ministers held in Shanghai last Friday. (read: How to Celebrate Chinese New Year with ETFs).

Given this, China ETFs are expected to see smooth trading in the coming days, with China A-Shares ETFs likely to be the biggest beneficiaries. Some of the China A-Shares funds including Market Vectors China SME-ChiNext ETF (CNXT - ETF report), Deutsche X-trackers Harvest CSI 300 China A-Shares Fund (ASHR - ETF report) and KraneShares Bosera MSCI China A Share ETF (KBA - ETF report) have a solid Zacks ETF Rank of 2 or ‘Buy’ rating, suggesting that they will outperform their rivals.

Apart from these, the most popular large-cap focused funds – iShares FTSE China 25 Index Fund (FXI - ETF report), iShares MSCI China Index Fund (MCHI - ETF report) and SPDR S&P China ETF (GXC - ETF report) – also seem excellent picks. These funds provide broad exposure to the Chinese equity market and have a Zacks ETF Rank of 3 or ‘Hold’ rating. The ETF targeting the financial sector Global X China Financials ETF (CHIX) would also be in the spotlight. CHIX also has a Zacks ETF Rank of 3 (see: all Emerging Asia-Pacific ETFs here).

Meanwhile, metal prices jumped on the news given that China is the largest buyer of raw materials. As a result, both precious and industrial metal ETFs would be on investor’s radar for the coming days. Notably, ETFS Physical Precious Metals Basket Shares (GLTR - ETF report) – providing exposure to all four precious metals in the physically backed form – and PowerShares DB Precious Metals Fund (DBP - ETF report) – offering exposure to futures contracts on gold and silver – will be in focus. Both funds have a Zacks ETF Rank of 3.