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By Jason Stipp and Jeremy Glaser | 09-25-2014 04:00 PM

Friday Five: China Chills and Apple Hits Some Speed Bumps

Tensions rise as China's growth struggles, Apple gets a slight case of the bends, and more.

Note: Today's Friday 5 was filmed prior to news of Bill Gross' departure from PIMCO to join Janus. For more on that story, please see our related reports: PIMCO Funds Under Review Following Gross' Exit and PIMCO Investors: Time to Reassess, Not Panic

Jason Stipp: I'm Jason Stipp for Morningstar and welcome to The Friday Five: Morningstar's take on five stories in the market this week.

Joining me with The Friday Five is Morningstar markets editor Jeremy Glaser.

Jeremy, thanks for being here.

Jeremy Glaser: You're welcome, Jason.

Stipp: Up first this week is China. There was some news happening recently, including some rumors that they may replace the head of their central bank. This seems to be stoking some underlying fears about China that have been around for a while.

Glaser: There is still concern about how much China is going to be able to grow from its current base. They are struggling to reach that 7.5% growth target that's set by the government, and what we've seen now is a bit of tension within the Chinese government, with some factions that want more short-term stimulus measures to get back to that 7.5% growth rate, and others that want to focus more on reforms and try to create a base that's going to make it easier for the economy to grow in a more stable, more sustainable fashion over time.

The head of the central bank is known as someone who is more in the reform camp rather than being in that short-term [stimulus] camp, and the fact that there is talk of him being replaced could be a sign of what side, at least internally, is starting to win that debate.

Dan Rohr, an analyst here at Morningstar, has done a lot of work on China and what's happening with Chinese growth. He also sees this tension over spending a lot of money on infrastructure, particularly in areas where it may not be needed. It can boost growth in the short term, but it's not sustainable. You really need that consumer-led growth, but how are you going to have that hand off?

I think how China manages that transition is going to be a big determinant of whether we see a gradual slowdown over time, or if we see the kind of hard landing that people have been concerned about.

Stipp: We also got news this week that the government is taking steps to crack down on tax inversions. We saw tax inversions driving a lot of recent M&A activity. What's the latest news?

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