Trade war with the US may be weighing on China's economy more than earlier anticipated. Data on industrial output for the month of May showed that its growth had slowed down to a 17-year low. Hours after the weak data, China's central bank announced a fresh support of 300 billion yuan (USD 43 billion) to small banks.
After the unexpected fall in growth and existing slowdown in investment flow, analysts are expecting the Chinese authorities to announce more support measures if the trade dispute between the two largest economies in the world intensify.
Data from the National Bureau of Statistics on Friday, showed that the industrial output grew at 5 percent in May, when compared to a year-ago. It is lower than April's 5.4 percent and the weakest reading since 2002.
Meanwhile, the officials have repeatedly said that its economy is strong enough to overcome the trade war. Recently, China's central bank governor said that he had "tremendous" room to adjust monetary policy if the conflict deepens.