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Data: Investing.com; Chart: Axios Visuals

Official statistics out of China suggest it is bouncing back from the coronavirus outbreak that shuttered the country for much of the first quarter, but there is growing speculation that data is being massaged to paper over a bevy of nagging issues.

Driving the news: China said manufacturing activity returned to expansion in March, with its official metric rising to 52.0. Economists had expected a reading of 45.0 after hitting a record low of 35.7 in February.

  • The official index tracking services and construction rose to 52.3, the government said.
  • Official reports also showed 95% of factories had reopened by mid-March, the Institute of International Finance notes, cautioning that anecdotal evidence suggests "utilization rates are still low due to the lack of orders and workers."

What we're hearing: The services sector numbers, in particular, are worth watching, says Matthew P. Goodman, senior adviser for Asian economics at the Center for Strategic and International Studies.

  • "It’s still pretty dubious that there’s been a substantial bounce back yet, and the authorities may be exaggerating those numbers to make people feel a little better about this than has been quite warranted yet," he said during a conference call Monday hosted by the Council on Foreign Relations.

Others were less kind. "The China COVID numbers are fake and the China PMI number is also fake," Alan M. Cole, senior economist at the U.S. Congress Joint Economic Committee, said on Twitter.

On the other side: Unofficial numbers tell a different story. "Overdue credit-card debt swelled last month by about 50% from a year earlier," Bloomberg reported, citing unnamed executives at two banks. Per Bloomberg...

  • "Qudian Inc., a Beijing-based online lender, said its delinquency ratio jumped to 20% in February from 13% at the end of last year."
  • "China Merchants Bank Co., one of the country’s biggest providers of consumer credit, said this month that it 'pressed the pause button' on its credit-card business after a 'significant' increase in past-due loans."
  • "An estimated 8 million people in China lost their jobs in February."

Why it matters: "These issues in China are a preview of what we should expect throughout the world," Martin Chorzempa, a research fellow at the Peterson Institute for International Economics, told Bloomberg.

Go deeper: Coronavirus could force the world into an unprecedented depression

Go deeper

Top economic regulators stressed by vacancies

Illustration: Annelise Capossela/Axios

The boom times are all around us (from corporate deal sprees to the breakneck rise of cryptocurrency) — and the agencies in charge are stretched thin trying to police it.

Why it matters: Overwhelmed staff and a slew of vacant posts could set back President Biden's big regulatory agenda.

GOP Sen. Chuck Grassley announces run for re-election

Photo: Greg Nash/The Hill/Bloomberg via Getty Images

Sen. Chuck Grassley (R-Iowa), the longest-serving Senate Republican, announced on Friday that he's running for re-election in 2022.

Why it matters: The GOP is looking to regain control of both chambers of Congress in the upcoming midterm elections. Several Republicans had urged the 88-year-old senator to run to avoid another retirement after five incumbent senators said they wouldn't seek re-election.

China deems all cryptocurrency transactions illegal

A person walking past China's central bank in Beijing in August 2007. Photo: Teh Eng Koon/AFP via Getty Images

China's central bank declared on Friday that all cryptocurrencies are illegal, banning crypto-related transactions and cryptocurrency mining, according to Reuters.

Why it matters: China's government is now following through with its goal of cracking down on unofficial virtual currencies, which it has said are a financial, social and national security risk and a contributor to global warming.

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