This　study　examines　the　effect　of　targeted　easing　(TE),　an　unconventional　monetary　policy　designed　to　reduce　reserve　requirement　ratios　(RRR)　of　selected　financial　institutions,　on　reducing　financing　constraints　of　Chinese　small　businesses.　Using　a　longitudinal　sample　of　listed　small　businesses　between　2003　and　2018,　we　find　that　the　implementation　of　a　TE　policy　significantly　reduces　financing　constraints　of　small　businesses　as　measured　by　the　cash　flow　sensitivity.　In　addition,　the　policy　effect　is　stronger　when　reductions　in　RRR　are　targeted　at　financial　institutions　specialized　in　small　business　lending　than　at　banks　with　a　threshold　level　of　small　business　loans.　We　also　document　that　small　businesses　with　larger　financing　needs　benefit　significantly　more　from　the　TE　policy　and　experience　a　larger　reduction　in　their　financial　constraints.　Moreover,　the　TE　policy　effect　is　more　salient　in　state-owned　small　businesses　than　privately　controlled　enterprises.　These　results　are　also　robust　to　alternative　measures　of　financing　constraints.　©　2020,　Springer　Science+Business　Media,　LLC,　part　of　Springer　Nature.