China's economy posted its second-slowest year of economic growth since 1976, another indication the post-COVID world economy could be vastly different from the decades that preceded the pandemic, Matt writes.

Why it matters: Since it burst onto the world economic stage in the early 1990s, China's economy has been a central driver of business decisions in virtually every part of the world economy, including Australian and Brazilian miners; oil producers in the Gulf; British and American bankers; Argentinian farmers; and German automakers.

Driving the news: New numbers from China's National Bureau of Statistics showed its economy expanded by just 3% for the full year, down from 8.1% in 2021.

What they're saying: "It is very surprising in our view that the reported numbers for December were not worse, given the large Covid wave in the month," Goldman Sachs economic analysts wrote in a note to clients.

Context: Analysts tie the country's recent economic ills to its harsh "Zero COVID" lockdown policies, which wreaked havoc last year.

Yes, but: China's economic problems go beyond the virus.

• Years of a speculative frenzy in housing have caught up with the country. Home prices are now deflating, and major homebuilders appear dangerously over-indebted.
• The government's sudden confrontation with its formerly high-flying tech sector spooked global investors, prompting foreign investors to pull capital from the country.
• The impact of the virus, as well as growing political tensions with major trading partners such as the U.S., are driving diversification away from Chinese supply chains.

What's next: Now, a long-predicted demographic downturn in the country has also arrived.

• Numbers released by China on Tuesday showed its population shrank for the first time since the 1960s, as deaths outpaced births.
• While birthrates have long been slowing in China — a typical phenomenon as countries become more affluent — it marks a major tipping point.

The bottom line: The combination of geopolitical tensions, domestic disarray and demographic decline mean it's all but impossible that China's economy regains its previous vigor.

Go deeper

🇨🇳 Yellen plans her first trip to China as Treasury secretary. (Axios)

🚘 Here's what's at stake for Elon Musk in a shareholder trial over 2018 Tesla tweets. (Axios)

💸 FTX discloses shortfall of funds, due to hack. (MarketWatch)

🧑‍🍳 How restaurant workers fund lobbying to keep their pay low. (NYT)

Overall consumer spending fell 4.3% in December from the previous month, according to a Morning Consult survey released this morning, with an increasing share of Americans spending more money than they're earning, Emily writes.

Why it matters: Inflation may be easing, but high prices are still a big problem for individuals, particularly after a year of spending down savings. It's not a great sign for economic growth.

Details: Shoppers are increasingly making tradeoffs. To afford rising food prices at home — up 12%, per the latest CPI — households cut back on restaurant spending by 8%, Morning Consult found.

Yes, but: This is just one data point. The drop in December could be attributed in part to folks doing their holiday shopping a little earlier than usual.

What to watch: More data on retail sales at the end of 2022 will be out later this morning.

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Bitcoin's on a hot streak, passing $21,000 this week, up more than 25% for the year. A bit of whiplash after a punishing 2022, Emily writes.

• Much of the surge came after the December CPI showed inflation easing.

Despite the high-profile meltdowns of the last year, "bitcoin was never dead," Brady Dale, who cowrites Axios' crypto newsletter, tells us. But he cautions, this latest rally is "probably temporary."