CHINA FINANCIAL
Analyst
Michael Pettis
Professor of Finance, Peking UniversityRecent Country Insights
Quick thoughts on the Two Sessions
CHINA FINANCIAL · Report · 08 Mar 2024
Special points to highlight in this report: * Although we can expect flexibility on the downside, China’s 2024 GDP growth target of 5 percent is nonetheless aggressive given the headwinds. There are debt constraints on a major revival of investment—whether in the property sector, infrastructu...
The Year of the Dragon is supposed to be a good year
CHINA FINANCIAL · Report · 12 Feb 2024
Special points to highlight in this report: * One of the key issues in the Year of the Dragon is likely to be how seriously Beijing is about reining in non-productive infrastructure spending among its more highly-indebted provinces. In an announcement last month— that didn’t get as much attent...
2023 ended pretty weak, suggesting a weak start for 2024
CHINA FINANCIAL · Report · 17 Jan 2024
Special points to highlight in this report: * There were no surprises in Beijing’s recent economic data releases, either for December or for the full-year 2023. As expected, with annual GDP growth of 5.2 percent, China managed to exceed its GDP growth target, but (also as expected) not withou...
Managing debt will be a major issue for Beijing in 2024
CHINA FINANCIAL · Report · 28 Dec 2023
Special points to highlight in this report: * The problem of what to do with the debt will probably dominate economic policy-making discussions in Beijing in 2024. As of now, there seems to be a split between economists, who want to address the quality of economic activity, and non-economists,...
China’s external constraints
CHINA FINANCIAL · Report · 17 Nov 2023
Special points to highlight in this report: * We continued to see a slow recovery in growth in October along with, far more importantly, a slight improvement in the quality of growth, as consumption growth for the year outpaced GDP growth. But as always, nothing fundamental has changed. *...
Bank share prices imply slower long-term growth
CHINA FINANCIAL · Report · 18 Oct 2023
Special points to highlight in this report: * We continue to see the expected partial recovery in the Chinese economy for the second half of 2023, thanks to expansionary policies by Beijing and a surge in debt. For now, I expect this partial recovery to continue through the end of 2023 and in...
Expect a pickup in economic activity over the rest of 2023
CHINA FINANCIAL · Report · 28 Sep 2023
Special points to highlight in this issue: * Data releases in August suggest that we will see an increase in economic activity over the rest of the year, and perhaps even a partial reversal of the relative weakening this year of consumption as a share of GDP. There is a sense that the PBoC an...
China’s debt cannot be resolved by shuffling debt-servicing costs
CHINA FINANCIAL · Report · 29 Aug 2023
Special points to highlight in this issue: * July data were very poor, indicating that weak demand continues to plague the Chinese economy. Imports were down, inflation was low, and retail sales seriously disappointed. * Debt creation in July was much lower than expected, but economic gro...
Surging Chinese (and US) debt is structural
CHINA FINANCIAL · Report · 17 Jul 2023
Special points to highlight in this issue: * Both June and second quarter numbers were disappointing. I continue to expect growth to surprise on the upside in the second half of 2023, but only because there is increasing pressure on Beijing, worried about a disappointing first half of the yea...