China Economy Starts 2018 on Solid Trajectory After Profits Dip Earliest private economic data signal brighter January outlook Industrial profits moderated for a third month in December As the latest China data showed some softening at the end of an upbeat year, reports for this month are looking likely to show the economy keeping pace despite slowing industrial profits. The earliest indicators for January show momentum remains intact, with sales managers the most upbeat since July, financial experts more optimistic, and satellite imagery signaling manufacturing conditions are improving for the first time in four months. That reading is in line with forecasts that both main factory gauges remained at solidly expansionary levels “The strong momentum will likely be carried over to the first quarter, with the economy being supported by strong external demand and domestic consumption,” said Xia Le, chief Asia economist at Banco Bilbao Vizcaya Argentaria SA in Hong Kong. “The risk factor is deleveraging, as the market is still underestimating how tough it could be as China shifts its focus to the quality rather than speed of the growth. Such a transition was Beijing’s main message to the world this week as Liu He, President Xi Jinping’s chief…

Chinese President Xi Jinping has unleashed the world’s biggest experiment aimed at taming runaway property prices. After Xi used a milestone Communist Party Congress in October to push a housing model that emphasizes renting, a flurry of activity is underway by developers, banks, local governments and even the biggest stock exchange. The push is the first of a package of programs, including a long-awaited property tax, poised to unfold over several years to rein in one of the world’s wildest real estate markets. Xi is leveraging his immense power to try to solve a problem that’s dogged policy makers around the globe: spiraling property prices in major metropolitan areas that have fueled rising inequality. The aim seems to be a new market model, somewhere between the capitalist frenzy that sent home prices in Shanghai and Beijing rocketing ever higher and the Communist system where dwellings were allocated by work units. Establishing a vibrant rental market will help to defuse the risks from “irrational” home prices, said Deng Yongheng, of the University of Wisconsin, who helped carry out a study that showed a 1,538 percent gain in land prices in Beijing from 2004 to 2016. The long-term effects could range from…