Category Archive: China

Main Author Michael Pettis
Michael Pettis
Wall Street veteran, merchant banker, equities trader, economist, finance professor, entrepreneur — iconoclast — Michael Pettis is a unique individual living and working in China, at the heart of the world’s most exciting and vibrant economy. Having learned firsthand how markets operate during his years on Wall Street, Michael has taken his knowledge and insight and applied them to the Asian financial markets as an expert analyst, commentator, and participant. His work and research focuses on monetary policy, trade policy, and the development of the banking and financial markets in China.

China Says It Is Ready To Assume “World Leadership”, Slams Western Democracy As “Flawed”

Over the weekend China used the Trump inauguration to warn about the perils of democracy, touting the relative stability of the Communist system as President Xi Jinping heads toward a twice-a-decade reshuffle of senior leadership posts.

Great Graphic: China’s PPI and Commodities

China's PPI rose for the first time in four years. It is related to the rise in commodities. Yet there are good reasons there is not a perfect fit between China's PPI and commodity prices. US and UK CPI to be reported next week, risk is on the upside.

China and Japan Chart Update

A chart-up from China and Japan. Growth of Chinese industrial production, retail sales, fixed asset investment is at lows not seen since the Asian financial crisis. The Yuan is falling. Economic data from Japan is not a lot better.

China’s 3 trillion dollar mistake

When looking at the current state of the Chinese economy it is important to note what happened leading up the ongoing predicament. By managing the USD/CNY exchange rate the Chinese factory worker was essentially funding excess consumption in the Unit...

China, the SDR, and Toward a Less Euro-Centric World

(Here is a draft of a monthly column I write for a Chinese paper) It is official.  The Chinese yuan will be in the SDR.  At a 10.4% share, it is a bit more than I expected, but less than the 14%-16% share that the IMF staff has intimated a few ...

China in Continuous PPI Deflation and No Depression In Sight?

Both Chinese PMI and the producer price index (PPI) are in deflation since 2012. This opens a lot of questions about the sustainability of Chinese economic growth, but also about the certain economic theories that consider deflation as a precursor of...

Democracies Like Bubbles, Totalitarian Regimes Hate Them

Totalitarian regimes, like China, fear bubbles and revolutions. Strangely, these regimes help to prevent asset bubbles, and the resulting unequal distribution of wealth between rich asset owners and the poor without assets. Today’s FT article...

Will the China Bubble Bust? Pros and Cons

Economic experts and even rating agencies remain in dis-accord about the height of Chinese total debt and if this will continue to slow the Chinese economy.

The Cyclical and Exchange-Rate Induced Chinese Slowing

We believe in the Chinese economy, but it has just gone into a cyclical and a exchange-rate induced slowing. Any Cassandra views like recently by Charles Dumas, chief strategist of Lombard Research, but also some of Richard Koo’s earlier views,...

How 40% Renmimbi appreciation vs Yen Caused a Deflationary Commodity Price Shock for World Economy

  Everybody is wondering why China is currently so weak, with a HSBC manufacturing in contractionary territory. No wonder, the main competitor in electronics and many more products,the Japanese yen has appreciated by nearly 40%. While China has to...