There’s good news, so-so news and bad news from China. The good news: China’s export machine has performed better than expectations, backed by a robust supply chain that sustained little damage from a nation-wide power shortage. Exports to the US are 30% higher than January 2018 when the US imposed tariffs on Chinese goods. China’s economy is more integrated with Asian trading partners than ever. China is investing heavily in AI-driven technology. The so-so news: Chinese regulators stage-managed the property market shakeout starting in September. This is a reorganization rather than a crisis, but it will leave a nasty hangover in credit market for some time, and a weak real estate sector will drag down GDP growth during the next quarter or two. Nonetheless consumption remains on track. The bad news: Xi Jinping’s campaign for a third term has left the political class paralyzed, increasing the likelihood of policy blunders. Beijing went too far in bashing the tech sector, and made a shambles of the coal supply situation, and there could be more problems of this sort.

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