CHINA FINANCIAL

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Country Analysts

Michael Pettis
Professor of Finance, Peking University

In The News

Recent Country Insights

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December’s economic work conference
CHINA FINANCIAL - Report 21 Dec 2018
Special points to highlight in this issue: The annual Economic Work Conference ended today, and Beijing has released the official statement summarizing the event. It said most of the things we expected it to say. In 2019 Beijing will continue to try to walk the impossibly fine line between stimul...

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Why isn’t the US a trade-surplus economy?
CHINA FINANCIAL - Report 07 Nov 2018 1 response
Special points to highlight in this issue: In a well-functioning world of global trade, the US should either run a more-or-less balanced trade account or it should run persistent trade surpluses. In standard trade theory, it is the norm for rich, mature economies with high income levels and effic...

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Bad news for China from Brazil; no news in the Chinese data
CHINA FINANCIAL - Report 31 Oct 2018
Special points to highlight in this issue: Jair Bolsonaro’s election Sunday as President of Brazil is not, at least on paper, especially good news for China. The “tropical Trump” has attacked China consistently in his speeches, but even if he has no intention of following through, to the extent t...

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Is rising household debt helping China to rebalance?
CHINA FINANCIAL - Report 02 Oct 2018 1 response
Special points to highlight in this issue: It is not meaningful to refer to a rebalancing of the Chinese economy if the growth in the consumption share of GDP is powered by rising household debt. The goal of rebalancing is to allow China to grow without a worsening of the country’s debt burden. C...

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China’s highly distorted private equity funding
CHINA FINANCIAL - Report 18 Sep 2018
Special points to highlight in this issue: Economists usually try to evaluate a country’s debt position according to various debt ratios, but what often matters even more is how institutional distortions affect debt dynamics. China’s financial system is locked into a process in which excessive cr...

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Tariff wars are likely to be disinflationary
CHINA FINANCIAL - Report 07 Aug 2018
Special points to highlight in this issue: Contrary to what many seem to believe, tariffs, even if they are much more widely implemented in the US, China, and elsewhere, are not likely to exacerbate inflationary pressures. On the contrary, they are more likely to be disinflationary because they w...

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Will China step again on the gas?
CHINA FINANCIAL - Report 30 Jul 2018 1 response
Special points to highlight in this issue: Over the past three months a scandal has emerged at Huarong Asset Management which may turn out to have substantial implications for the Chinese economy and for asset liquidation abroad. Huarong is the largest of the four AMCs created in 1999, and has lo...

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Can China sustain RMB depreciation?
CHINA FINANCIAL - Report 28 Jun 2018
Special points to highlight in this issue: Beijing must be seen as having the ability to respond effectively and powerfully to American threats of trade intervention. RMB depreciation is one of the few responses it has, which is probably why the RMB has dropped 4 percent against the US dollar in ...

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How long will China’s slowdown last?
CHINA FINANCIAL - Report 18 Jun 2018
Special points to highlight in this issue: A sharp slowdown in economic growth in May was preceded by a sharp slowdown in credit growth. Analysts are confusing the slowdown in credit growth with the deleveraging process, and will undoubtedly point out that Chinese deleveraging is causing growth t...