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China’s growth enigma

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China’s growth enigma

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The Chinese economy grew by 5.2 per cent last year, according to official statistics. But for many in business, it probably did not feel like that from the evidence on the streets of Beijing and other large cities.

Restaurants were not busy, shops were vacant and there were widespread reports of property prices falling more than the official numbers. Rhodium Group, a research company, argued in December that most economic indicators in 2023 suggested actual growth was more like 1.5 per cent. There were bright spots, it said, such as electric vehicle production, but these could not offset the “general malaise”.

For business, the divide between such estimates and official data on how fast the world’s second-largest economy can grow this year and beyond has become an important issue for their global expansion plans. An annual survey by the American Chamber of Commerce in China of its members found just over half were planning to increase their investments in the country this year, a little up from last year. For slightly more than a quarter of this group, expectations of faster economic growth in 2024 were an important factor.

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The question of measuring that growth though is becoming increasingly politicised as Beijing seeks to steer the narrative away from criticisms that its growth model is overly dependent on state-driven investment rather than consumption.

In its annual report on China released on Friday, the IMF said that the country’s post-pandemic recovery last year was “subdued” as property and weak exports and investment weighed on growth. It also forecast slower growth in 2024.

This provoked an indignant response from Chinese officials. IMF staff should provide a “more appropriate forecast” to help China “stabilise” confidence “at home and abroad”, said a statement from Zhengxin Zhang, China IMF executive director, that accompanied the IMF’s report.

So who is right? At 5.2 per cent year-on-year, Beijing’s official 2023 gross domestic growth figure is the lowest in decades, excluding the pandemic years of 2020 and 2022, But is still sizeable for an economy of China’s heft and sophistication.

The issue for China though is that the rebound might have been expected to be more robust from 2022 — a year when Covid lockdowns and rigid travel restrictions hit service industries and supply chains and deepened the slowdown in the property sector.

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While growth was strong in the first quarter of 2023, it required increasing government support as the year wore on. Consumption, boosted by the release of pent-up demand from lockdowns, made up most of the growth in 2023. However, consumer confidence remained well below pre-pandemic levels towards the end of the year, the IMF said. It estimated that net foreign direct investment also declined from 2022.

Lower business and market confidence was reflected in capital markets. China’s CSI 300 stock index has lost 5.5 per cent this year, compounding falls in 2023. The benchmark is down 45 per cent from 2021 highs. And the AmCham China survey showing that while profitability of its members had improved in China from 2022, most companies were breaking even or lossmaking, further suggesting less than robust growth.

The government insists that everything is going to plan. Yet domestically it has cracked down on dissenting opinions about the economy, deepening long-running scepticism about the accuracy of official data.

Some economists believe that when calculating real GDP growth from nominal data, Beijing is able to adjust the deflator, the broadest measure of prices in the economy, to hit its targets. “Some estimates suggest that official Chinese data overstate its GDP by around 20 per cent,” Oxford Economics wrote in December.

For 2024, the IMF is forecasting 4.6 per cent growth and then about 3.5 per cent by 2028 on “weak productivity and ageing”. These forecasts are broadly in line with market expectations. Oxford Economics is predicting growth to fall to about 3.5 per cent by 2030 and just 2 per cent by 2040, possibly delaying the day that China’s economy will converge with the US in terms of size.

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China’s Zhang responded that the country still has many growth drivers — the population is getting older but more educated, urbanisation has more room to grow and Beijing is investing in science and technology. “China will continue to be the vital engine of global economic growth,” insisted Zhang. Global boardrooms are hoping he is right. But the bar is rising for China to prove it.

joseph.leahy@ft.com

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A day after Alito’s testy response to Sotomayor’s dissent, court says it was a ‘misunderstanding’

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A day after Alito’s testy response to Sotomayor’s dissent, court says it was a ‘misunderstanding’

The justices of the U.S. Supreme Court, with Justice Sonia Sotomayor (seated left) and Justice Samuel Alito (seated second from right).

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As the Supreme Court heads into the announcement of its final and hugely important opinions next week, there are reverberations from this week’s announcements, and Justice Samuel Alito’s public rebuke of his colleague Justice Sonia Sotomayor.

On Thursday, Justice Alito summarized from the bench three very big opinions he authored for the court’s six justice conservative majority. Alito, unlike most of his colleagues, doesn’t spend much time on these summaries. And it is rare that a justice has three big opinions to announce, but it is almost the end of the term, and there are a lot of big cases still outstanding.

The first case he announced came and went. Alito then moved on to a second case, this one tests whether migrants may apply for asylum in the U.S. by going to one of several ports of entry along the U.S.-Mexican border, and presenting themselves for admission. This entails presenting documents that persuade an asylum officer that applicants’ fear of persecution in their home country is credible enough to allow them to enter the U.S. while their asylum application is processed. Alito’s opinion ruled in favor of the Trump administration’s policy of refusing all such applicants by blocking them at the border. It was a policy also followed at one time by the Obama administration until it was blocked by the lower courts.

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After Alito finished his summary of the opinion, he paused, at which point Justice Sotomayor read a summary of her contrary views in dissent. When she finished, however, Justice Alito did not move on to the announcement of his third opinion. Instead, he did something that nobody in the press corps ever remembers happening before. Looking much as if he had just bitten into a lemon, Alito said, “There is much that I would have added to my bench statement had I known there would be a dissent read.” And he then went on to a short extemporaneous rebuttal.

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“It’s blood money”: Family of exonerated man in Texas yogurt shop murders speaks out after settlement

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“It’s blood money”: Family of exonerated man in Texas yogurt shop murders speaks out after settlement

The widow and the daughter of Maurice Pierce, one of the four men wrongfully accused in the 1991 Texas yogurt shop murders, have confirmed they signed a multimillion-dollar settlement with the city of Austin.

Kimberli and Marisa Pierce spoke with correspondent Erin Moriarty in a new episode of the podcast “48 Hours: Case by Case.” Moriarty has reported on the yogurt shop murders for over 30 years. 

Maurice Pierce’s widow Kimberli made clear that their priority has never been financial compensation. “It’s blood money for us. He died for this money,” Kimberli Pierce said. “It’s about the reform and the changes that need to happen, not only in Austin, but apparently across the country.”

They also went into great detail about what they believe happened when Maurice Pierce was shot and killed by police in 2010. 

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Maurice Pierce was one of four men, along with Michael Scott, Robert Springsteen and Forrest Welborn, who were wrongfully accused in the murders of four teenage girls in Austin on Dec. 6, 1991. Eliza Thomas, Amy Ayers, and sisters Jennifer and Sarah Harbison were tied up, shot and left inside the yogurt shop as it was set ablaze. 

The four men were exonerated in February after investigators linked another man, Robert Eugene Brashers, to the killings. The city of Austin subsequently offered a $35 million settlement. Because Maurice Pierce died in 2010, his share of $10 million will go to Kimberli and Marisa Pierce.

Eight days after the killings, 16-year-old Maurice Pierce was arrested at a mall, carrying a .22, the same caliber handgun connected to the crime. Kimberli Pierce said police told Maurice Pierce that his gun was the murder weapon. He responded by mentioning his friend Forrest Welborn. Maurice Pierce was then wired up and sent to speak with Welborn, but investigators ultimately determined that Welborn and the others knew nothing about the murders, and no charges were filed at that time.

Marisa Pierce has said there was no evidence when her father was questioned, “only a detective and a narrative, a narrative so completely false. It feels evil.”

From left, Maurice Pierce, Forrest Welborn, Michael Scott and Robert Springsteen were exonerated in February 2026 after investigators linked another man, Robert Eugene Brashers, to the December 1991 killings of four teenage girls in an Austin, Texas, yogurt shop. 

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Nearly eight years later, in 1999, all four men were arrested after Scott and Springsteen confessed to the murders. They later recanted, saying they had been coerced. Springsteen and Scott were tried and convicted, but later those convictions were overturned on constitutional grounds. A subsequent DNA test excluded all four men. Maurice Pierce was never convicted but spent three years in jail before his release in 2003. 

Kimberli Pierce said her husband came home a hardened man. She believes police continued to harass Maurice and their family after his release. In 2010, Maurice Pierce was stopped for a routine traffic stop, fled on foot, and was shot and killed by an Austin police officer who said Pierce had stabbed him with a knife. 

Marisa and Kimberli Pierce told “48 Hours” that they intend to review the circumstances surrounding the night of Maurice Pierce’s death. Marisa Pierce revealed in new, emotional detail that she was on the phone with her father at the time. She believes he panicked and was only trying to get away, not to hurt anyone. She described her father’s last breaths: “And in those last moments, he had just said I’m sorry, I don’t think you’re gonna see me again, and I love you.” 

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“48 Hours” reached out to the Austin Police Department about the Pierces’ allegations of harassment and their questions about Maurice Pierce’s death in 2010. The police department said they had no additional comment.

For the Pierce family, the settlement is a starting point, not an end point. They have put forward seven proposed reforms they hope the city of Austin will approve, including appointing a child advocate whenever a minor is questioned, prohibiting deceptive interrogation tactics, educating juveniles about their rights and establishing accountability measures to address tunnel vision in police investigations.

In a statement shared with “48 Hours,” the Pierces wrote: “Real justice is not only about acknowledging harm after the fact but about creating safeguards that prevent future families from enduring the same pain.”  

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The Maine Town That Actually Wants a Data Center

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This year, Maine nearly became the first state to pass a statewide moratorium on new data centers. But before the law could take effect, supporters of an A.I. data center project in the small town of Jay rallied to fight the ban — and won. So why do residents there want one? We traveled to Jay to find out.

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