Imbalances, Disequilibria and Correlation Traps

by Michael Pettis, China Financial Markets Chiwoong Lee at Goldman Sachs has a new report out (“China vs. 1970s Japan”, September 25, 2012) in which he predicts that China’s long-term growth rate will drop to 7.5-8.5%.  I disagree very strongly with his forecast, of course, and expect China’s growth rate over the next decade to …