Reduced trade tensions with the US allowed China to keep its benchmark lending rate unchanged, a rare sign of stability as economic challenges compound for the world’s second-largest economy.
Improved ties with Washington — including a possible meeting between the leaders of both nations — have boosted China’s stock markets in recent weeks. But growth is down, with factory output and retail sales last month increasing at their slowest rate in a year. Meanwhile, youth unemployment recently hit almost 19%, forcing authorities to keep unproductive firms running to avoid unrest.
Experts, some of whom are predicting a further slowdown in the third quarter, suggested the economy’s poor performance may force Beijing to approve a major economic stimulus.
