(Preview) K-Shaped Economic Data And Its Implications; Ma Xingrui News; Closing Window for Open Source AI?; The SCS and International Law

**Andrew Sharp** (0:04)
Hello, and welcome to Sharp China. I'm Andrew Sharp, and you are listening to a free preview of today's episode.
Hello, and welcome back to another episode of Sharp China. I'm Andrew Sharp, and on the other line, Bill Bishop. Bill, how are you doing?

**Bill Bishop** (0:21)
Hola, everyone. I'm doing well. I think we, you know, it looks like it's going to be Spain and maybe Argentina, so we're all going to practice our Spanish.

**Andrew Sharp** (0:31)
There we go. I was like, did he just say, Hola? Okay, Spain, Argentina. I'm not ready to concede anything to Argentina. I'm officially pulling for England.

**Bill Bishop** (0:41)
I'm neutral. Now, I just got to say, I mean, it's messy. Come on, between messy and FIFA, the odds are not low.

**Andrew Sharp** (0:50)
That's true.
Yeah, bet on like five red cards for the England team later this afternoon. I wish these games weren't being played at three o'clock in the afternoon. That's one World Cup take, because it feels like less of an event in the middle of the day. But FIFA wants the European audience in the midst of all this.

**Bill Bishop** (1:09)
Which is fair.

**Andrew Sharp** (1:10)
It is, but we're hosting it, you know. You should be catering to the American audience when it's in Europe or the Middle East. I think 2030 is the Middle East. No, 2034 is the Middle East. It will be played in primetime in those countries. That would be my guess anyways.
In any event, I look forward to the World Cup final. Whoever the second team is does look like Spain's probably the team to beat at this point. Really, really impressive against France on Tuesday.

**Bill Bishop** (1:38)
Yeah, so we're recording at 11 a.m. Eastern time on Wednesday. So the second semifinal is what, in four hours.

**Andrew Sharp** (1:44)
Right, it will be set by the time you are listening to this podcast. We will begin not with soccer, but with Reuters, who wrote, Wednesday, China's economy expanded at its slowest pace in more than three years in the second quarter, missing forecasts with weak household consumption, clouding strong manufacturing and exports, and intensifying concerns over the long-term sustainability of its unbalanced growth model. At 4.3%, second quarter GDP growth eased from the first quarter's 5%, landing below the lower end of China's 4.5% to 5% full year target. The data adds pressure on Beijing to deliver more stimulus, but many analysts say a closely watched end of July meeting of the Communist Party's Politburo may not flag major steps due to concerns over ballooning debt. Jane Ho, who runs a European goods importing business in Eastern China, says her income has roughly halved since the beginning of the year as her firm's sales have dropped. An apartment she rents out has been without a tenant for more than six months, a reflection of China's huge housing oversupply and prolonged property crisis. So a lot of information there, and some specific ANIC data at the end of that Reuters report.
The data is not good.
What will you be watching over the next few weeks and maybe months as the system responds to the status quo?

**Bill Bishop** (3:20)
No, the data is not great. The target range for GDP growth this year was 4.5 to 5 percent, so they're still within that. For the first half, they're in that range.
But if they continue at 4.3 percent, obviously then for the rest of the year, they won't be. So, but is the data that dire that they're suddenly going to roll out what so many continue to hope for? Stimulus, probably not.

**Andrew Sharp** (3:51)
Right, pivot from the grin and bear it approach of the last several years.

**Bill Bishop** (3:54)
A lot of this, I think, is within the range of what they can tolerate, especially given the turmoil that's coming from the war in the Middle East.
Earlier this week, at the end of July, there's the Poly Bureau meeting and that Poly Bureau meeting is usually to sum up the recent economic activity and provide any additional tweaks to planning for the balance of the year, and or at least the next quarter.
On Monday, Li Chang, he'll meet with experts. On Monday, he met with academic experts, economists, and some entrepreneurs. And one of the lines in the readout was that, you know, generally, it's off to a good start. You know, obviously, there are some challenges. They're very aware and they talk about some of the challenges. One of the things he said was countercyclical adjustment must be stepped up and existing. So there may be some marginal, sort of more forceful policies coming by, I guess it would be end of next week or early the week after. Yeah, two weeks from now basically. This print sort of materially changes the trajectory of their current policies. And so I think that people who are falling closely, I don't think we're particularly surprised. So, you know, they're just going to kind of grind it along.