EVERYTHING IS GOING SWIMMINGLY (CHINA EDITION): China’s Lackluster GDP Growth.

China’s reported economic growth of 5.2% year-on-year in the fourth quarter of 2023 might look like the envy of the world. But look closer, and worrying signs appear.

The data released Wednesday show a Chinese economy growing at its slowest pace since 1990, excluding the pandemic years. Growth in industrial production slowed from month to month in the quarter. Fixed-asset investment offers hope, but much of the growth was supported by government spending while housing continues to struggle.

Chinese officials have long said they’ll accept growth slower than the 8% or more a year of the 2000s if it’s higher quality, meaning derived from rising productivity and less dependent on rampant credit creation. That doesn’t appear to be happening. The struggling parts of the economy—such as consumption, measured by slowing retail sales—ought to be expanding if growth were more productive.

Instead China appears to be leaning again on easy credit.

For the last 20 years or so, this country relied on easy credit, too — right up until we couldn’t.