Country Analysts

Michael Pettis
Professor of Finance, Peking University

In The News

Recent Country Insights

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What impact the coronavirus?
CHINA FINANCIAL - Report 29 Jan 2020
Special points to highlight in this issue: • The Wuhan coronavirus will have a significant impact on the underlying growth rate of the Chinese economy, but this will not show up as lower GDP growth. It will show up as faster credit growth. • The ultimate impact of the coronavirus is likely to b...

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China and the impossible trinity
CHINA FINANCIAL - Report 07 Jan 2020
Special points to highlight in this issue: • Capital flight continues to be a major issue for Beijing, with the “Errors and omissions” account at an all-time high. • The central bank wants to maintain relatively easy monetary conditions as it tries to work its way through China’s debt burden, b...

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The December Economic Work Conference
CHINA FINANCIAL - Report 11 Dec 2019 2 responses
Special points to highlight in this issue: It is too early to say for sure, but it looks like the Economic Work Conference for later this month will settle on a GDP growth target of “around 6 percent”, which I interpret to mean 5.8 percent to 6.0 percent. There has been an enormous amount of deb...

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New Delhi blocks Beijing on RCEP
CHINA FINANCIAL - Report 04 Nov 2019
​Special points to highlight in this issue: While India’s rejection of the Regional Comprehensive Economic Partnership (RCEP) agreement at the summit meeting in Bangkok seems to have come as a surprise, as the main trade deficit member in a world of weak demand it is hard to see how India woul...

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Xi Jinping versus Deng Xiaoping
CHINA FINANCIAL - Report 29 Oct 2019 1 response
Special points to highlight in this issue: Although I personally do not expect anything new to come out of the Fourth Plenum, currently in session, that suggests that there will be any change in Xi’s approach to leadership, I can assure my reader that I would have no way of knowing whether or...

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What’s going on in the Chinese balance of payments?
CHINA FINANCIAL - Report 30 Sep 2019 5 responses
Special points to highlight in this issue: * For the first half of 2019 “Errors and omissions”, in the balance of payment data, are higher than they have ever been in China: USD 131 billion. This is equal to nearly two-thirds of the recorded trade surplus, and is nearly 50 percent higher than...

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Supply-side solutions for demand-side problems
CHINA FINANCIAL - Report 20 Sep 2019
Special points to highlight in this issue:​ * Although China’s GDP growth has continued to slow quite dramatically, Beijing doesn’t yet seem to have been panicked into planning a heavy stimulus. Although I do think we can expect a mild stimulus in the next month or two, I continue to believe t...

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Hong Kong is distracting us from the growth and credit data
CHINA FINANCIAL - Report 19 Aug 2019
Special points to highlight in this issue: * While nothing can be ruled out in such a politically complicated environment, the cost of a direct intervention by forces loyal to Beijing into Hong Kong is very high, making it unlikely. An intervention would cause a sharp fall in Chinese exports ...

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What does it mean for the RMB to “crack 7”?
CHINA FINANCIAL - Report 05 Aug 2019
​• The RMB closed above 7 to the dollar today for the first time since before the financial crisis in 2008, and that was part of the currency’s steady appreciation path since July 2005. This is mainly about political signaling, and reflects the fact that Beijing has very few tools with which to r...

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