China is losing a war. It was around this time just last year that President Xi Jinping declared China was going to war against financial risk, poverty and pollution. Reducing debt, cutting excess industrial capacity and inducing bureaucrats to curb pollution were to be his main weapons. A statement released after a Politburo meeting late Wednesday suggests China is shifting gears to deal with a more pressing threat: “growing downward pressure on the economy.” (The statement was released just after we noted disappointing Chinese factory data.) Beijing still says it wants “quality” growth, but also notes that “some enterprises are having operational difficulties and long-term accumulated risks are exposed.” According to the statement, China must act swiftly to “enhance predictability and take timely countermeasures.” That most likely means economic stimulus, though there are also reports the government will loosen real estate controls and focus more on capital markets. I
Daily Memo: A Lost War in China, a ‘Troika of Tyranny’
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