Jan 22, 2019

China's unclear economic outlook

Illustration: Rebecca Zisser/Axios

China's year-end economic data dump presented an ambiguous picture of the world's second-largest economy that analysts chose to paint in various ways by cherry picking data points.

The big picture: When taken as a whole, the data reflects an economy that could be slowing or could be slowly turning from one driven by high-flying export growth to one sustained by a consumer-focused, service sector that Chinese government officials have declared they want.

What they're saying: Some have been ringing the alarm of an economic slowdown in China, pointing to historically weak readings.

  • China's economy expanded 6.6% in 2018 — the slowest annual pace the country has seen since 1990.
  • In the fourth quarter, GDP growth came in at 6.4% year-over-year, the slowest since 2009.

China's government has long been accused of padding the numbers on economic data, and some expect that weak readings like these are proof that the country's real economy is actually growing much more slowly.

Yes, but: Also included in the data dump are a collection of strong data releases that don't fit the falling dragon motif.

  • China's industrial output rose 5.7% year-over-year in December, more than the 5.3% economists were expecting.
  • Fixed asset investment rose 5.9% year-over-year, nearly matching economists' predictions of 6%.
  • Retail sales data rose 8.2% in December, up from November's 8.1% gain.
  • Production in high-tech industries, strategic emerging industries and equipment manufacturing expanded 11.7%, 8.9% and 8.1%, respectively.

What to watch: For U.S. businesses, a clearer picture of what's happening could come this week when companies with significant revenue from China — including Starbucks, Wynn Resorts and Ford — report quarterly results.

Go deeper: Other companies are feeling the heat in China's slowing market

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Sign of the times: A pro-Warren super PAC

Democratic presidential candidate Sen. Elizabeth Warren at a rally in Nevada. Photo: Alex Wong/Getty Images

A group of women progressives who back Sen. Elizabeth Warren has formed Persist PAC, a super PAC airing pro-Warren ads starting Wednesday in an effort to boost her performance ahead of Saturday's crucial Nevada caucuses, a spokesman told Axios.

Why it matters: Warren has spoken adamantly against the influence of unlimited spending and dark money in politics. But these supporters have concluded that before Warren can reform the system, she must win under the rules that exist — and that whether she likes it or not, their uncoordinated help may be needed to keep her viable through this weekend's contest and into South Carolina and Super Tuesday.

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Pentagon policy chief resigns amid reported discord with Trump

John Rood. Photo: Mark Wilson/Getty Images

John Rood, the Pentagon's top policy official, will resign from his post on Feb. 28, CNN first reported and President Trump confirmed.

The state of play: CNN said Rood "was perceived as not embracing some of the changes in policy the White House and senior Pentagon officials wanted," such as peace talks in Afghanistan with the Taliban and a decision to cut back on military exercises with South Korea as the president courted North Korea's Kim Jong-un.

Coronavirus cases rise, as warnings of global pandemic grow

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

We may be "at the brink" of a global pandemic, warns a top U.S. public health official, as cases continue to spread despite containment efforts. Meanwhile, the global economy is being affected, including the tech manufacturing industry.

The big picture: COVID-19 has now killed more than 2,000 people and infected over 75,000 others, mostly in mainland China, where the National Health Commission announced 136 new deaths since Tuesday.

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