Weakened dragon

Consumption in China continues to slow, evidenced by retail sales growing by just 2% in June—falling short of expectations and marking a significant disappointment for the political leadership ahead of this week's Communist Party conclave. The housing market remains depressed, local governments are heavily indebted, foreign investors are divesting, and the population is aging. As Jason Douglas and Rebecca Feng report in the WSJ, Xi Jinping's priorities lie elsewhere. He is focused on reducing China's dependency on Western technology, particularly semiconductors, and strengthening China's capabilities in future technologies such as electric vehicles and solar panels. Reviving China's growth trajectory in the medium term will be a formidable challenge.