Daily Memo: China’s Economy, U.S. Military Cooperation, Israel and Iran

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GPF Staff |January 2, 2019

More bad news from China’s economy. On Wednesday, Caixin/Markit released its report on China’s Purchasing Managers’ Index, a measure of factory activity among small and medium-sized companies. For the first time in 19 months, the index fell below 50 to 49.7 in December, a sign that factory activity in the country contracted for the month. This came two days after China released its official PMI, which also fell below 50 to 49.4. (The government’s PMI focuses on larger companies.) Though the trade war between the U.S. and China has lowered factory orders, Caixin notes that reduced domestic demand also contributed to the decline – unsurprising, considering Beijing is extending much less credit than it used to. The data are significant in and of themselves, but given the precariousness of Beijing’s political balancing act and China’s regional security more generally, they are especially foreboding. The more intense China’s domestic economic challenges are, the more tense i

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