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Michael Pettis 118 posts 0 comments

Michael Pettis is a Senior Associate at the Carnegie Endowment for International Peace and a finance professor at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets. Pettis has worked on Wall Street in trading, capital markets, and corporate finance since 1987. Pettis is a member of the Institute of Latin American Studies Advisory Board at Columbia University as well as the Dean’s Advisory Board at the School of Public and International Affairs. He received an MBA in Finance in 1984 and an MIA in Development Economics in 1981, both from Columbia University. He writes the blog .

Revisiting predictions on China on debt, growth and crisis

Michael Pettis May 3, 2012

In 2006 I started making a number of predictions based on what I thought was the necessary and logical development of China’s growth model. Some of these predictions seemed fairly outlandish, especially to China analysts – Chinese and…

Economy

The ways China can rebalance

Michael Pettis Apr 9, 2012

To try to work out what China's future economic options might be I will begin with two key assumptions. The first is that the fundamental imbalance in China is the very low GDP share of consumption. This low GDP share of consumption, I have…

Political Economy

The Economist sees (and raises)

Michael Pettis Mar 30, 2012

The Free Exchange blog at The Economist has accepted my bet, and very cleverly (the bastards!) they have added a second one. For two years I have been arguing that a Chinese rebalancing will require much slower GDP growth rates than we…

Economy

The Japan debt disaster and China’s (non)rebalancing

Michael Pettis Mar 20, 2012

In this issue of the newsletter I want to sketch out a scenario in which rather than analyze policy announcements or make predictions I try to lay out what are the various possible paths open to China. The scenario concerns trade. China’s…

Economy

Tough medicine and a hard landing for China

Michael Pettis Mar 11, 2012

Michael Pettis predicts a hard landing in China. How much will growth slow? The World Bank report apparently doesn’t say, but the consensus has been slowly moving down towards 5-6% annual growth over the next few years. That’s better than…

Economy

When will China emerge from the global crisis?

Michael Pettis Feb 22, 2012

In 2008 and 2009 I argued that the crisis we were undergoing would affect every major economy in the world, but not necessarily at the same pace. I said that China would be the last major economy to emerge from the crisis. Why? Because the…

Economy

On building debt

Michael Pettis Jan 24, 2012

I am glad to say that the overinvestment thesis is much more widely acknowledged today than it was even two or three years ago, but one myth, I think, is that most of the overinvestment excesses in China are concentrated in the real estate…

Political Economy

If no trade reversal now, then when?

Michael Pettis Jan 9, 2012

The best resolution, and the one Keynes urged without success on the US in the 1920s and 1930s, is that Germany take steps to reverse its trade surplus. It could boost disposable household income and household consumption by cutting income…

Economy

China: Lots of news, signifying nothing new

Michael Pettis Dec 17, 2011

I don’t think there is a whole lot to say about this week’s numbers beyond what I have been saying for the past several months. Nothing substantial has really changed. China’s external account is worsening, and will continue to worsen…

Economy

How do we know that China is overinvesting?

Michael Pettis Dec 3, 2011

For years I have been arguing that the Achilles heel of the Chinese growth model is the unsustainable rise in debt that comes as a necessary consequence of capital misallocation fueled by bank lending. Capital misallocation, I argued, was…