Bottom Line: China Rebalancing is about Handling Bad Debt

I got a lot of feedback from my January 5 blog entry because of my argument that the implementation of the reforms proposed in the Third Plenum all but guarantees that growth rates in China will slow down.

Debt Must be Repaid, Even Hidden Debt

by Michael Pettis, China Financial Markets Five or six years ago, a few skeptics first started pointing out that the credit dynamics underlying Chinese growth was creating an unsustainable increase in debt. This, they warned, would ultimately undermine the banking system and cause growth to collapse if it were not addressed in time.

Rebalancing and Long Term Growth

by Michael Pettis, China Financial Markets As analysts and official entities like the World Bank continue to downgrade their forecasts for medium-term growth in China, I have been asked increasingly often for the reasons I believe that 3-4% average annual growth rates is likely to be the upper limit for China during the adjustment period. …

The Urbanization Fallacy

by Michael Pettis, China Financial Markets Editor’s note: See also Documentary of the Week from BBC on a Chinese urbanization project. The latest default bull argument supporting higher levels of growth in China than I believe possible is the urbanization argument. Beijing is planning another major urbanization push, and according to this argument China can …

China: Balancing Political Ideology and Economic Pragmatism

Written by Jillian Friesen, GEI Associate, and John Lounsbury Last week the new Politburo Standing Committee of the Communist Party of China was introduced to the world. All of those who were elected are new members to the committee, including the new party leader Xi Jinping (pictured, Source). Also, they represent a rainbow of conservative …