Warning signs

China’s rising risks of more immediate economic crises on the horizon [View in browser]( [Bloomberg]( Nasty surprises are showing up in China’s economy — and stimulus measures won’t do much to solve them. Beijing unexpectedly cut interest rates today as a raft of disappointing data showed growth remains sluggish. Markets aren’t impressed. Key Reading: [China Cuts Rate by Most Since 2020 as Economic Woes Deepen]( [China Halts Youth Jobs Data, Stoking Transparency Concerns]( [China Market Turmoil Amps Up Pressure for Policymakers to Act]( [China’s $138 Billion Shadow Bank Spirals at Terrible Time for Xi]( The problem is that policymakers are no longer just facing a faltering recovery and lackluster consumption, slow-burning issues that can tolerate solutions that take longer to implement. Instead, pockets of intense financial pressure are building up across China. These are threatening to spill over, bringing potential contagion risks and even posing a threat to social stability. Take shadow banking: Firms affiliated with one of China’s largest private wealth managers have missed payments owed for products from the $3 trillion trust sector, which has heavy exposure to the property industry. They’re unlikely to be the only players juggling these pressures. Chinese mega-developer Country Garden is also at risk of defaulting, prompting worries about other firms also once offered government support. And the release of youth unemployment data — a politically sensitive area for the Communist Party after nationwide protests led by students last year — has now been suspended after a three-month stretch of record highs. These problems pose incendiary risks that will require swifter steps to solve. President Xi Jinping’s government has spent the past few years trying to deal with so-called grey rhinos — slow-moving but highly probable hazards like local government debt and property bubbles. Instead, that’s raising the danger of more immediate crises on the horizon.— [Rebecca Choong Wilkins]( A near-empty shopping mall in Shenzhen on Aug. 9. Photographer: Qilai Shen/Bloomberg [Sign up]( for our twice-weekly newsletter Next Africa, and if you are enjoying this newsletter, sign up [here](. Global Headlines Donald Trump was indicted for the [fourth time]( in as many months, this time with 18 co-defendants over efforts to overturn the results of his 2020 presidential election defeat in the US state of Georgia. The 41-count indictment assigns an array of alleged crimes, ranging from making false statements, soliciting public officials to violate their oaths, forgery, influencing witnesses, computer theft and perjury. They have until Aug. 25 to [surrender]( to authorities. - The former president’s latest financial disclosure [revealed a sprawling portfolio]( that includes everything from his primary residence to revenue from resorts and crypto investments that he could theoretically tap to fuel his 2024 White House comeback bid. At an emergency meeting, Russia’s central bank raised interest rates to the highest level in over a year after the ruble plunged past 100 to the dollar and cast a pall over the economy. The currency’s fall triggered rare infighting between the bank and the Kremlin, as other prominent voices said it posed a threat to social stability and made Russia [look vulnerable]( as sanctions imposed over the war in Ukraine hit trade. - Read our rolling coverage of the war in Ukraine [here](. In Taiwan — the self-governing island about 100 miles east of China that has Washington and Beijing contemplating the prospect of a [destructive conflict]( — Vice President Lai Ching-te leads a surgeon, a detective and a billionaire in opinion polls ahead of elections slated for January. Cindy Wang and Joel Weber explain that if he wins, it could set up Taiwan for four more years of peace and prosperity. Or the result could start a war that, as an opposition politician puts it, “opens the doors to hell.” Best of Bloomberg Opinion - [Affirmative Action’s End Demands a Rethink: Michael R. Bloomberg]( - [China Is Acting More Like a Scrooge Than a Socialist: Minxin Pei]( - [Ron DeSantis Isn’t Bad at Politics: Jonathan Bernstein]( It was panic stations in Argentina following the stronger-than-expected primary vote performance on Sunday by libertarian candidate Javier Milei, who wants to ditch the peso in favor of the US dollar and abolish the central bank. After years of trying to [avoid a currency devaluation]( that would add to soaring inflation and reduce its popularity with voters, President Alberto Fernandez’s government did just that. Explainers You Can Use - [Why Argentina’s Trump-Like Candidate Roils Markets]( - [Why Hawaii’s Power Lines Are Suspect In Maui Fire]( - [How Carbon Capture Is Getting New Life With US Help]( Prime Minister Narendra Modi promised more measures to rein in food prices in India just as retail inflation hit a 15-month high, signaling the cost of living will be a major [campaign issue]( in elections scheduled for next year. Food-driven inflation is always a concern for political parties in India, with incumbents losing power in the past because they couldn’t control the price of items like onions — a staple in the world’s most populous nation. Tune in to Bloomberg TV’s Balance of Power at 5pm to 6pm ET weekdays with Washington correspondents [Annmarie Hordern]( and [Joe Mathieu](. You can watch and listen on Bloomberg channels and online [here](. News to Note - South Korean President Yoon Suk Yeol said Japan is a partner sharing common values, [extending an olive branch]( to his neighbor in a speech marking the end of Japanese colonial rule over the Korean Peninsula in 1945. - House Speaker Kevin McCarthy told Republican colleagues yesterday that he expects a [“short-term” funding measure]( would be necessary to avoid a US government shutdown. - Move Forward Party, the surprise winner in Thailand’s May election, [ruled out supporting]( a coalition-led by Pheu Thai Party and its prime minister nominee, Srettha Thavisin. - Italian Deputy Premier Antonio Tajani wants [substantial changes to a controversial levy]( on banks’ extra profits, Corriere della Sera and la Repubblica newspapers reported. And finally ... Europe’s citizenship-by-investment programs are alive and well, despite calls from across the political spectrum to end them. In Greece and Portugal, the number of so-called [golden visas]( granted that allow wealthy foreigners to gain EU residency has been on the rise, and demand in Italy and Spain has hit record levels. More than 132,000 people obtained citizenship through the programs between 2011 and 2019 and political blowback has intensified with them being associated with soaring property prices and lax regulation. Tourists in Venice. 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