China Down But Far From Out Under U.S. Assault

Enda Curran
China Down But Far From Out Under U.S. Assault

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The last time China’s economy grew this slowly, a youthful Bill Clinton was campaigning for the presidency on the mantra, “it’s the economy, stupid!”

It’s a sentiment not lost on today’s Chinese leadership, which can take solace from data beyond the headline statistics suggesting their efforts to keep the world’s second-biggest economy on course may be gaining traction. Those signs of robustness will embolden China’s negotiators as they face down trade hawks in Washington.

While China’s 6.2.% growth from April to June was the slowest since quarterly data began in 1992, factory output, retail sales and investment all looked more rosy. That’s a fillip for Chinese efforts to prioritize stimulus.

China’s resilience in the face of President Donald Trump’s determination to take on Beijing over trade, as well as its technological base, will also be of some relief to open economies around the world that have built up a reliance on Chinese markets.

Still, economists warned the Chinese figures could be as good as it gets. And they do nothing to dispel a growing willingness among political leaders to abandon a multilateral approach and stoke tensions on trade and other issues.

Taken together, the Chinese data amount to a fragile lifejacket in a raging global storm.

Global Headlines

Go home | Trump critics called him racist after he tweeted yesterday that four non-white female Democratic lawmakers should return to the “broken and crime-infested places from which they came,” even though three of them were born in the U.S. His comments on the day his administration started carrying out raids in major cities to remove illegal migrants signaled he’s sharpening his anti-immigrant message ahead of the 2020 race for the White House.

Read why Democrats disagree over how to defeat Trump on immigration

Click here on NBC-WSJ Poll Matchups showing Trump's Democratic rivals

Arms trade | India and Russia have agreed to settle defense contracts in rupees and rubles instead of dollars to avoid U.S. sanction risks and banking restrictions. The new mechanism would potentially release billions of dollars in contract payments to Russia, N.C. Bipindra and Evgenia Pismennaya report. Even so, it may still be dependent on India winning a waiver from Trump to avoid U.S. penalties that threaten Russian weapons buyers.

Italy's Russia tape  | A scandal over possible illegal financing from Russia just keeps bothering Matteo Salvini, the EU-skeptic dominant force in Italy's populist government. Salvini and Prime Minister Giuseppe Conte are at odds over who invited Gianluca Savoini, a close ally of the League party leader, to a July 4 dinner in Rome with Vladimir Putin. Savoini sought illegal party funding last year from three Russians, according to a report by Buzzfeed news, a charge he denies.

Trump’s word | The U.S. may announce a package of sanctions against Turkey for its purchase of a Russian missile-defense system as early as this week, according to people familiar with the matter. The Turkish side is betting that Trump will be lenient, disregarding those in Congress and other parts of the U.S. government calling for harsher measures.

French connection | France’s admission that it owned U.S.-made missiles found at a Libyan base seized from warlord Khalifa Haftar’s forces indicates it had operatives on the ground supporting his offensive on Tripoli, the interior minister of Libya’s internationally-recognized government said in an interview. He disputed France’s claim the missiles were inoperable and said his government has asked experts from the UN and U.S. to examine the weapons to confirm they're in working order.

What to Watch

Ursula von der Leyen, an ally of German Chancellor Angela Merkel, has one more day to chase support among left-leaning factions in the European Parliament before facing a confirmation vote that she must survive to clinch the European Union's top policy-making job. French President Emmanuel Macron travels to Serbia today to allay concerns about the future of EU enlargement after he said the bloc can’t expand until it overhauls how it makes decisions. Former South African President Jacob Zuma is appearing before a judicial panel for the first time today to answer accusations that he consented to and benefited from widespread looting during his nine-year rule.

And finally ... The Irish playwright George Bernard Shaw once said “the English are not a very spiritual people, so they invented cricket to give them some idea of eternity.” On Sunday, the English men’s side won the World Cup in a nail-biting match that rekindled a sense of pride in a Brexit-battered nation. It didn’t take long for the moment to be ruined by arch-Brexiteer Jacob Rees-Mogg writing on social media that “we clearly don’t need Europe to win.” The irony, of course, is that the captain, whose mother is English, was born in, well, Ireland.

 

--With assistance from Benjamin Harvey, Anthony Halpin, Flavia Krause-Jackson and Caroline Alexander.

To contact the author of this story: Enda Curran in Hong Kong at ecurran8@bloomberg.net

To contact the editor responsible for this story: Karl Maier at kmaier2@bloomberg.net, Michael Winfrey

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