Michael Pettis
@michaelpettis.bsky.social
Senior Fellow at Carnegie China. For speaking engagements, please write to [email protected]
Michael Pettis is an American professor of finance at Guanghua School of Management at Peking University in Beijing and a nonresident senior fellow at the Carnegie Endowment for International Peace. He was founder and co-owner of punk-rock nightclub D22 in Beijing, which closed in January 2012. .. more
Economics
76%
Political science
11%
De-reservification, Not De-dollarization | Council on Foreign Relations
The world isn’t moving away from the dollar. It is shifting its dollars from traditional reserves to state banks, pension funds, and other quasi-sovereign investors.
www.cfr.org
Currency intervention used to be what central banks did. As trade conflicts rise, however, and as explicit currency intervention becomes increasingly criticized, it seems that many countries are simply shifting the locus of currency intervention away from central banks.
www.cfr.org/articles/de-...
www.cfr.org/articles/de-...
China Can Avoid a Financial Crisis. It Can’t Avoid the Cost.
Plus, the U.S. accuses Chinese AI firms of exploiting American models and designates an American scholar held by China as wrongfully detained | WSJ China for Sept. 15.
www.wsj.com
Lingling Wei: "Earlier this year, I put a blunt question to an adviser to China’s central bank: With the property bust grinding into its fourth year, how likely was it that the country’s strained financial system would finally crack into a full-blown crisis?"
www.wsj.com/articles/chi...
www.wsj.com/articles/chi...
3/3
The former is a proxy for GDP and the latter for consumption. When GDP grows faster than consumption, the economy must balance either with a rise in investment or a surge in the trade surplus. In August, fixed asset investment plunged 7.2% year to date, deepening from a 6.7% fall in July.
The former is a proxy for GDP and the latter for consumption. When GDP grows faster than consumption, the economy must balance either with a rise in investment or a surge in the trade surplus. In August, fixed asset investment plunged 7.2% year to date, deepening from a 6.7% fall in July.
2/3
Industrial output grew a very strong 5.2% in August, almost as fast as the 5.3% growth for the first eight months of the year.
Retail sales, however, came in even lower than already-low expectations. They were up 0.4% in August and up 2.5% in the first eight months of 2026.
Industrial output grew a very strong 5.2% in August, almost as fast as the 5.3% growth for the first eight months of the year.
Retail sales, however, came in even lower than already-low expectations. They were up 0.4% in August and up 2.5% in the first eight months of 2026.
China's retail sales of goods, services up 2.5 pct in first eight months
english.news.cn
1/3
Journalists who cover China must dread monthly data releases because they have to come up with new and interesting ways to say exactly the same thing: the supply side of the economy continues to do well while the demand side continues to weaken.
english.news.cn/20260915/e06...
Journalists who cover China must dread monthly data releases because they have to come up with new and interesting ways to say exactly the same thing: the supply side of the economy continues to do well while the demand side continues to weaken.
english.news.cn/20260915/e06...
Reposted by Bessma Momani
China tightens control of overseas travel in sweeping new law
President Xi Jinping steps up efforts to secure state secrets, advanced technology and highly skilled workers
www.ft.com
FT: "China has implemented sweeping new controls on overseas travel for Chinese citizens as President Xi Jinping steps up efforts to secure state secrets, advanced technology and highly skilled workers."
www.ft.com/content/3f2b...
www.ft.com/content/3f2b...
too.band
2/2
As an aside, and nothing to do with my own music series, next Wednesday my friend Blixa Bargeld will bring his legendary band, Einstürzende Neubauten, to Shanghai. I'll be there, of course, and I expect a large group of Beijing musicians will be there too.
As an aside, and nothing to do with my own music series, next Wednesday my friend Blixa Bargeld will bring his legendary band, Einstürzende Neubauten, to Shanghai. I'll be there, of course, and I expect a large group of Beijing musicians will be there too.
Reposted by Peter Holmes
1/2
To my friends in Beijing, tomorrow night one of my favorite musicians and composers, Zhang Shouwang, will be performing at our music series in a collaboration with cellist Shen Jing. Their shows are always standouts.
To my friends in Beijing, tomorrow night one of my favorite musicians and composers, Zhang Shouwang, will be performing at our music series in a collaboration with cellist Shen Jing. Their shows are always standouts.
A Great Rebalancing Is Coming
Who will bear the costs of a global trade adjustment?
www.foreignaffairs.com
2/2
In my Foreign Affairs piece I argue that Europe is in a difficult position. It has economic power at its disposal but what is much less clear is whether it has the political ability to exercise this power given the divergent interests of its member states.
www.foreignaffairs.com/united-state...
In my Foreign Affairs piece I argue that Europe is in a difficult position. It has economic power at its disposal but what is much less clear is whether it has the political ability to exercise this power given the divergent interests of its member states.
www.foreignaffairs.com/united-state...
European capitals barter over Christine Lagarde’s successor at ECB
Eurozone governments are negotiating a ‘grand package’ over three of the central bank’s most senior roles
ft.com
1/2
FT: "But a French chief economist for the ECB combined with a Spanish president would be “hard to imagine” for Berlin, while Paris would probably block a Dutch president and a German chief economist." ft.com/content/8988...
FT: "But a French chief economist for the ECB combined with a Spanish president would be “hard to imagine” for Berlin, while Paris would probably block a Dutch president and a German chief economist." ft.com/content/8988...
2/2
beginning to sound the alarm on a complex macroeconomic hangover. While AI is expected to significantly boost supply, it threatens to simultaneously suppress labor income, weaken consumer demand and trigger long-term deflationary pressures."
beginning to sound the alarm on a complex macroeconomic hangover. While AI is expected to significantly boost supply, it threatens to simultaneously suppress labor income, weaken consumer demand and trigger long-term deflationary pressures."
AI Boom Could Undermine China’s Push for Consumption-Led Growth, Economists Warn
The technology could lift productivity and supply while weakening labor income, consumer demand and prices, posing a fresh challenge for Beijing’s plan to revamp its growth model
www.caixinglobal.com
1/2
Caixin: "The global race to develop AI has largely been framed as a technological and financial triumph, promising to turbocharge productivity and reshape industries. Yet, as the initial euphoria settles, leading economists and industry executives are...
www.caixinglobal.com/2026-09-11/a...
Caixin: "The global race to develop AI has largely been framed as a technological and financial triumph, promising to turbocharge productivity and reshape industries. Yet, as the initial euphoria settles, leading economists and industry executives are...
www.caixinglobal.com/2026-09-11/a...
China Sets Cost Rules to Curb Industrial Price Wars
The NDRC and the market regulator have published a unified methodology to determine whether manufacturers are engaged in illegal low-price dumping
www.caixinglobal.com
Caixin: "China has established a framework for determining when manufacturers are selling goods below cost, giving regulators a clearer basis for intervening in price wars. The move forms part of Beijing’s broader campaign against so-called involution."
www.caixinglobal.com/2026-09-11/c...
www.caixinglobal.com/2026-09-11/c...
4/4
productive investment projects, in order to meet their GDP growth targets. Until the GDP growth target drop sharply (probably to below 2-3%), all Beijing can do is change the locus of debt creation. It will not be able to prevent growth in the debt-to-GDP burden from accelerating.
productive investment projects, in order to meet their GDP growth targets. Until the GDP growth target drop sharply (probably to below 2-3%), all Beijing can do is change the locus of debt creation. It will not be able to prevent growth in the debt-to-GDP burden from accelerating.
3/4
This won't help much. While waste and mismanagement may have added a little to the pace at which local-government debt has grown in recent years, what really drives it is the need for local governments to keep investing, no matter how hard it is to find...
This won't help much. While waste and mismanagement may have added a little to the pace at which local-government debt has grown in recent years, what really drives it is the need for local governments to keep investing, no matter how hard it is to find...
2/4
"The unusual joint disciplinary notice," Caixin adds, "highlights Beijing’s determination to contain financial risks as a yearslong campaign to tackle trillions of yuan in off-balance-sheet local government debt moves into a crucial phase."
"The unusual joint disciplinary notice," Caixin adds, "highlights Beijing’s determination to contain financial risks as a yearslong campaign to tackle trillions of yuan in off-balance-sheet local government debt moves into a crucial phase."
China Names and Shames Local Officials Over Hidden Debt Violations
A joint circular from the anti-graft watchdog and the finance ministry details six typical cases of creating new hidden debt or falsifying debt resolution progress
www.caixinglobal.com
1/4
Caixin: "China’s top anti-graft watchdog and the Ministry of Finance have publicly identified several local officials for either adding new hidden government debt or overstating progress in resolving existing liabilities."
www.caixinglobal.com/2026-09-12/c...
Caixin: "China’s top anti-graft watchdog and the Ministry of Finance have publicly identified several local officials for either adding new hidden government debt or overstating progress in resolving existing liabilities."
www.caixinglobal.com/2026-09-12/c...