Profile picture
, 3 tweets, 2 min read
My Authors
Read all threads
I don’t have any special skill in “reading the tea leaves of China’s secretive and opaque politics”, but Beijing knows that it must get debt under control and it knows that doing so means continued deceleration in GDP growth. Because this...
scmp.com/week-asia/opin… via @scmpnews
@SCMPNews ...has proven politically very difficult, I consider the pace of GDP deceleration to be a proxy for the extent to which Xi controls the political process. Given how quickly GDP growth seems to be slowing, and especially if we see GDP growth in the fourth quarter dip...
@SCMPNews ...solidly below 6%, I’d argue that whatever temporary problems he might have faced last year, for now Xi continues to be firmly in control.
Missing some Tweet in this thread? You can try to force a refresh.

Enjoying this thread?

Keep Current with Michael Pettis

Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

Twitter may remove this content at anytime, convert it as a PDF, save and print for later use!

Try unrolling a thread yourself!

how to unroll video

1) Follow Thread Reader App on Twitter so you can easily mention us!

2) Go to a Twitter thread (series of Tweets by the same owner) and mention us with a keyword "unroll" @threadreaderapp unroll

You can practice here first or read more on our help page!

More from @michaelxpettis see all

Profile picture
Michael Pettis
@michaelxpettis
One thing that seems to have come out of the 4th plenum is a serious determination to force local authorities to clean up and recapitalize local and provincial banks. There are basically three ways they can do this. One way is to force mergers among the banks, but because all...
...or nearly all the banks are effectively insolvent, this doesn't really address the problem and will have no immediate impact on the fragile liability side of the banks until they are big enough to attract a lot more retail deposits.

A second way is for local governments...
...to borrow and use the proceeds to capitalize the banks. This might fix the banks, but does so by transferring their net liabilities directly to provincial balance sheets. It doesn’t resolve the debt problem.

A third way is for local governments to transfer assets directly...
Read 5 tweets
Profile picture
Michael Pettis
@michaelxpettis
(Long thread warning) I think this is a very good article about Chinese growth, but I would disagree with two important points. First, while the acquisition of foreign technology has certainly contributed to Chinese growth, we may be...
the-american-interest.com/2019/10/22/how… via @aminterest
@aminterest ...overestimating its economic contribution.
Most recent Chinese growth has consisted of satisfying the huge investment needs from which China suffered after four decades of Maoism, anti-Japanese war, and civil war.

It was mostly basic, low- and medium-tech investment that...
@aminterest ...China needed and that powered Chinese growth, but while Beijing has also invested heavily in advanced foreign technology, the jury is out as to whether this has been or will be a net contributor to economic growth or, as was the case for example with the USSR in the 1960s...
Read 9 tweets
Profile picture
Michael Pettis
@michaelxpettis
One of the more questionable arguments made by China bulls a few years ago was that China’s poorer provinces would inexorably converge economically to the richer provinces, and that this process alone would guarantee 7-8% growth rates for...
scmp.com/economy/china-… via @scmpnews
@SCMPNews ...the next several years (and presumably even more if the richer provinces continued growing).
The “convergence” argument, however, assumes implicitly that growth is a linear process in which a set of “right” policies will have the same effect on any economy, regardless of...
@SCMPNews ...how its local institutions determine how productively workers and businesses can absorb these policies. It assumes that backwardness is linear rather than systemic, and for that reason more “backward” economies will grow faster as these policies are applied.
This was always...
Read 5 tweets

Related threads

Profile picture
IndoPacific_SCS_Info
@IndoPac_Info
#China’s targeting of the #NBA shows why it may fail at building soft power and the Chinese dream - By narrowing the boundaries of commentary, China is gradually alienating outsiders who might see opportunities there scmp.com/comment/opinio…
Xi Jinping is doing to foreign businesses what it has long done to domestic dissenters: punishing those whose words stray outside ever-narrower red lines. In attacking the NBA, which does not need China and would be difficult to replace, Beijing may have finally gone too far
The NBA controversy put the spotlight on Hong Kong & makes it more likely that the Hong Kong Human Rights and Democracy Act will pass. No other state would think of doing what China has done. This is behaviour unworthy of a proud, confident country with 2,000 years of statecraft.
Read 4 tweets
Profile picture
IndoPacific_SCS_Info
@IndoPac_Info
Thread of 3 Articles: Does #China have enough #US dollars to survive the US #tradewar? - China’s US$3.1 trillion in foreign exchange reserves may not be sufficient to support a crisis in the economy, analysts say scmp.com/economy/china-…
This is the first article in a three-part series looking at China’s US dollar shortage risks amid the trade war with the United States as it plans to reform and internationalise its economy.
Beijing’s increasing scrutiny of US dollar usage by Chinese companies & individuals, in the absence of any signs of a financial crisis, + accelerating efforts to lure in foreign capital, have raised suspicions that the China's economy is worried about running short of US dollars.
Read 44 tweets
Profile picture
Kyle Olbert 🇺🇸
@realKyleOlbert
#China’s Communist Party has been engaged in an economic campaign of “Unrestricted Warfare” against the Free World since it joined to @WTO in 2001. But they have a weakness in their non-free floating currency, the #yuan. W/ all due respect to @POTUS @realDonaldTrump, his…
… pressure on the @FederalReserve to keep interest rates low is misguided (& reminiscent of @RTErdogan’s disastrous mistake in #Turkey). If we want to fight #China as hard as they’ve been fighting us, we should encourage Fed Governors to *raise* interest rates and *contract*…
… the global monetary base. This contraction will expose structural economic problems in #HongKong & in mainland #China more broadly, including insolvent state-owned enterprises, an over-extension of corporate credit, under-capitalized Chinese banks, etc. Moreover, the…
Read 4 tweets
Profile picture
Christophe Barraud🛢
@C_Barraud
🇺🇸 🇨🇳 *U.S. WAITING TO HEAR FROM #CHINA ON TRADE DEAL, KUDLOW SAYS - BBG
*KUDLOW EXPECTS U.S.-CHINA MEETING IN MARCH IN MAR-A-LAGO
*TRUMP, LIGHTHIZER ARE VERY CLOSE, KUDLOW TELLS CNBC
🇺🇸 🇨🇳 #CHINA WOULD HAVE TO NOTE ANY FX INTERVENTION UNDER DEAL: KUDLOW - BBG
🇺🇸 🇨🇳 *MNUCHIN SAYS #CHINA #TRADE TALKS INCLUDE 150-PAGE DOCUMENT - BBG
Read 819 tweets
Profile picture
IndoPacific_SCS_info
@China_SCS_info
#China plans to sell #Pakistan an aircraft carrier and integrate it militarily - I believe a carrier for Pak is far fetched, but the article is very revealing about CN plans for Pak, something that usually gets dismissed @desertfox61I @avarakai sundayguardianlive.com/news/china-pla…
Beijing is increasingly integrating Pakistan into its military system to fulfill its global ambitions. Meanwhile, India refuses to sell Brahmos to Vietnam for fear of upsetting China. China is not reciprocating India's actions. #Huawei is allowed to bid for the 5G network.
Conscious Western efforts to retard its growth & access to hi-tech supply chains, Beijing has adopted an overtly benign tone with its neighbors. These are, however, cosmetic tactical measures & China’s ambition of developing “a kind of military force system” has not changed.
Read 13 tweets
Profile picture
Christophe Barraud🛢
@C_Barraud
🇨🇳 #CHINA Q3 GDP Y/Y: 6.5% V 6.6%E (slowest growth since Q1 2009)
*NBS spokesman Mao Shengyong said that the international situation was bringing “downward pressure” on China.
*Link: bloom.bg/2RVX1ZA
🇫🇷 🇪🇺 🇨🇳 French tire maker Michelin warned of declining sales in Europe and #China in the second half of the year, dragging down shares of its competitors in the U.S. and Europe - Bloomberg
*Statement: bit.ly/2EujhqH
🇺🇸🇨🇳🇪🇺 In a volley of filings, the EU, #China and the U.S. this week escalated disputes over new U.S. metals tariffs, the European response to those levies, and Chinese intellectual property practices - Bloomberg
bloomberg.com/news/articles/…
Read 634 tweets

Trending hashtags

#tradewar #ILLEGALY #Iran #coalition #JamesCartwright #Cambodian #Russia #Italy #invasion #Flextronics #Turkey #Gwadar #Australia #Strzok #mercenary #WhiteHouse #Arrests #Whitehouse #India #Manufacturing #TradeWar #Agriculture #WarCriminals #Taiwan #Syrians
Follow Us on Twitter!

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just three indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3.00/month or $30.00/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!