Questions and Concerns.

Iguala 8 years later.

1. China’s economy showed modest signs of improvement in August as stimulus measures kicked in, though renewed Covid-19 curbs and a worsening property downturn continue to damp the outlook for the world’s second-largest economy. A raft of data released Friday by Beijing offered a mixed picture: Infrastructure investment picked up more quickly than expected, but consumer spending remained weak and property prices accelerated their declines. Chinese fixed-asset investment in the first eight months of 2022 was up 5.8% from a year earlier, beating the median 5.5% forecast of economists surveyed by The Wall Street Journal. The pickup in investment was led by robust spending on infrastructure projects, a sign that Beijing’s rescue measures are starting to have some effect. Industrial production, a measure of factory output, mining and other activities, edged higher as power shortages triggered by drought and extreme heat across large swaths of the country eased. In August, the measure was up 4.2% from a year earlier, beating both expectations and July’s 3.8%. (Source: wsj.com, bloomberg.com)

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2. China’s local government financing vehicles are rushing to buy vast quantities of land with borrowed funds, bailing out cities and provinces struggling for cash after an exodus of debt-stricken private sector developers. The spending spree has been unleashed in the run-up to President Xi Jinping’s expected appointment to an unprecedented third term next month and highlights efforts to boost the pandemic-hit economy, which grew just 0.4 per cent year on year in the second quarter. Local governments have traditionally relied on LGFVs to support growth by spearheading infrastructure investment. Now, the financing vehicles are being called upon to prop up the real estate sector, which accounts for about one-third of total economic output. (Source: ft.com)

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3. Chinese investment in U.S. venture-capital funds is flowing, demonstrating that economic ties between Silicon Valley and China remain deep despite political and national security risks, according to investors, government officials and a new report. Chinese investment is on pace to reach about $880 million this year, the second-highest level in at least a dozen years, according to the think tank Foundation for Defense of Democracies. The report, a novel effort to quantify the opaque flow of money from China to U.S. venture-capital firms, shows Chinese government entities, funds, private individuals and corporations have invested at least $4 billion into U.S. venture firms since 2010, with at least another $3.5 billion going to U.S. private-equity firms. Silicon Valley investors and national security analysts say Chinese capital continues to back U.S. venture-capital firms large and small, sometimes accounting for a fraction of a venture fund and at times much more. U.S. government officials say their primary concerns have less to do with the amount invested, but are more about the investors’ personal and business relationships in Beijing, ability to access technical information and influence at the venture-capital firm. (Source: wsj.com)

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