China's Confidence Game

Nearly a year ago, we warned of what might happen if a crisis of confidence strikes China's economy. Recent economic numbers return this worry to the spotlight.

In 2018, China's economy grew at its slowest pace in nearly 30 years. In response, the country's central bank moved earlier this month to boost bank lending and then pumped a record $84 billion into the banking system.



Then we got a warning that excessive lending itself has become a problem with news that bad debt has reached its highest level in a generation. The International Monetary Fund warned recently that the biggest current threats to global economic growth are a "no-deal Brexit" and a sharp slowdown of China's economy. At the World Economic Forum in Davos last week, Kenneth Rogoff, a widely respected expert on debt crises, warned that China may be forced to rescue large parts of its financial and economic system.

China's economy has been cooling for several years, and there's no sign yet the country's leaders have lost confidence in their ability to manage. The government's latest moves signal concern, but not panic, about the current strength of the economy and its ability to weather the storm created by the trade war with Washington. A speech by President Xi Jinping last week at a special meeting of central and provincial-level leaders focused on other risks to China's future.

But China's leaders can't control how markets see their country and its economy. Particularly since, as I wrote last February, all of China's big political and economic decisions are made behind closed doors by seven men — the Politburo Standing Committee of China's Communist Party.

The day is coming when doubts about China's economic resilience will abruptly begin to grow, and it won't be easy for state officials, even if they're telling the absolute truth about what they believe, to calm markets. Today, there is confidence in the stats that China's government produces mainly because growth is believed to be relatively strong. That makes it easy for investors to ignore stories about Chinese provincial governments admitting they've faked their GDP data.

But here's the key question: During a Chinese market meltdown, when the government tries to ease fears with a release of reassuring numbers, will investors believe them?

Democrats have the power to impeach Donald Trump.

After all, impeachment simply requires a majority vote of the House of Representatives, and Democrats hold 235 seats to just 199 for Republicans.

Of course, impeaching the president is only the first step in removing him from office. It's merely an indictment, which then forces a trial in the Senate. Only a two-thirds supermajority vote (67 of 100 senators) can oust the president from the White House. Just two US presidents (Andrew Johnson in 1868 and Bill Clinton in 1998) have been impeached. Neither was convicted by the Senate.

Many Democrats, including two of the party's presidential candidates, argue the Mueller Report and other sources of information offer ample evidence that President Trump has committed "high crimes and misdemeanors," the standard for removal from office under Article Two of the US Constitution. But the impeachment question has provoked intense debate within the Democratic Party.

Here are the strongest arguments on both sides of the Democratic Party's debate.

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Should Sri Lanka have blocked social media following the terror attacks?

That's a hard one. Misinformation spreads on social media and there's an instinct to say, "Wait, stop it!" But a lot of useful information also spreads and people get in touch with each other. So I would say no they should not have blocked it.

Are Tesla cars at risk of exploding?

There was one video from China of a parked Tesla exploding. I don't think you really have to worry about it though. I am curious to know what that video was really about.

Why do tech companies hate the census citizenship question?

Because if you ask people whether they're citizens. A lot of people will answer and you'll get bad data and the card companies need to know where they set up their operations. Good data matter to Silicon Valley.

What happened during the Space X Crew Dragon accident?

We don't know this one for sure either but one of the engines in a SpaceX test exploded. No one was hurt. Let's hope it was something to do with the way it was set up - not something deep and systematic.


And go deeper on topics like cybersecurity and artificial intelligence at Microsoft Today in Technology.

What's troubling you today? A revisionary new talk show hosted by Vladimir Putin offers real solutions to your everyday problems.

Crises create opportunities. That's the story of European politics over the past decade, and Spain offers an especially interesting case in point.

On Sunday, Spanish voters will go to the polls in the country's third national election in less than four years. Gone are the days when just two parties (center-right and center-left) dominated Spain's national political landscape. As in other EU countries, the economic spiral and resulting demand for austerity triggered by Europe's sovereign debt crisis, and then a tidal wave of migrants from North Africa and the Middle East, have boosted new parties and players. Catalan separatists have added to Spain's political turmoil.

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