Michael Pettis Profile picture
Sep 29, 2020 5 tweets 2 min read Read on X
1/5
It's not so much Atlanticism but international relations more generally that will remain in retreat no matter who wins the US election, and although the world tends to be obsessed with the US and with its bilateral relationships, this retreat won't...

ft.com/content/09f95f…
2/5
depend on whoever is the US president. People in most countries believe their countries should turn inwards.

I argued in my 2013 book that we were going through a period in which global trade would inevitably contract, geopolitical conflicts...

amazon.com/Great-Rebalanc…
3/5
intensify, and anti-foreign and anti-immigrant feelings rise, and I think this remains a global issue. Perhaps because of its obsession with the US and with, more recently, the Trump circus, much of the world (and the global press) seems to focus on bilateral problems the...
4/5
US has with Europe, China and Russia, but in fact the three have equally, and often more, serious problems with many of their own immigrants, neighbors and international relationships, and this says nothing about either intra-European conflict or similar problems affecting...
5/5
India, the UK, Saudi Arabia, Brazil etc. Unfortunately I think the widespread desire to turn inwards and reject "foreigners" is structural, based on domestic economic imbalances, and so will continue for a few more years before reversing.

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Michael Pettis

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!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @michaelxpettis

Mar 9
1/6
China's deflationary environment continues to improve, with high-than-expected numbers in February. CPI inflation was 1.3% year on year and 1.0% month on month. Month-on-month inflation has been positive since December and mostly positive since July.
english.news.cn/20260309/3fc64…
2/6
The Spring Festival always makes January and February data noisy, but ever since Beijing decided to go after the problem of involution last May and June, we've seen deflationary pressures ease. But we also saw investment growth decelerate sharply. This isn't just coincidence.
3/6
Involution was largely caused by the post-2022 shift in investment growth out of property and into favored manufacturing sectors. Beijing's move to cut excess capacity in involuted industries reduced both total investment and defllationary pressure.
carnegieendowment.org/posts/2025/08/…
Read 6 tweets
Mar 7
1/8
Bloomberg: "China will issue 300 billion yuan of special sovereign bonds to recapitalize some of its largest banks, marking an expansion of Beijing’s efforts to fortify the nation’s financial system against a cooling economy and market volatility."
bloomberg.com/news/articles/…
2/8
Chinese banks are caught between record low net-interest margins and worsening loan quality, and so are forced to recapitalize, but this just reflects the same set of inconsistencies between high growth targets and low consumption that we see everywhere else in the economy.
3/8
Banks are forced to lower lending rates partly because highly-indebted borrowers are struggling to service their debts and partly because Beijing wants to encourage any additional investment it can in an economy that already has too much capacity.
Read 8 tweets
Mar 5
1/7
Xinhua: "China will actively boost consumption and implement an income growth plan for urban and rural residents, according to a government work report submitted Thursday to the country's top legislature for deliberation."
english.news.cn/20260305/4203c…
2/7
This is certainly the right thing to say – the only sustainable way to raise the consumption share of GDP is to raise the household income share – but it tells us very little.

Raising the household income share means reducing the business and/or government shares.
3/7
So how will these transfers occur? Almost certainly not at the expense of businesses. Given that much of China's manufacturing sector is barely breaking even, even after huge direct and indirect subsidies, the sector is clearly not efficient enough to tolerate...
Read 7 tweets
Mar 5
1/6
Xinhua: "China targets an economic growth of 4.5 percent to 5 percent this year."

While this is the lowest target in decades, it's still roughly twice what I think the economy can sustainably deliver without a lot more more non-productive investment.

english.news.cn/20260305/d0f4b…
2/6
It is a good sign that Beijing has set a lower target this year (certainly better than rigidly sticking to a 5% GDP growth target), but the truth is that it doesn't change much. China will still have trouble – for all its promises – getting consumption growth to accelerate.
3/6
This suggests that the underlying dynamics of the Chinese economy will remain the same. China still can't tolerate any significant decline in the trade surplus and, more importantly, it can allow only a very small deceleration in investment growth.
Read 6 tweets
Mar 4
1/12
Very interesting Bloomberg article on one of my favorite topics – how, in a hyperglobalized world (i.e. one with very low transportation, communication, and financial-transaction costs), countries that control their external accounts effectively...
bloomberg.com/news/articles/…
2/12
externalize domestic economic conditions by passing them on to the rest of the world via trade- and capital-flow imbalances. These imbalances are automatically absorbed by those of their trade partners who choose to exert less control over their external accounts.
3/12
According to Bloomberg: "Chinese banks, flush with low-cost funds, are reshaping parts of the global loan market, underscoring how deflationary pressures in the world’s second-largest economy are increasingly influencing competition with international lenders."
Read 12 tweets
Mar 1
1/9
Good piece in Nikkei Asia by former acting deputy U.S. trade representative Wendy Cutler on trade-related discussions during Trump's upcoming trip to China. She argues, however, that for a president focused on...
asia.nikkei.com/opinion/trump-…
2/9
rebalancing, Trump must "hold China's feet to the fire," including pressing for export restraints in sectors like steel and autos and tougher action on transshipments – or tariff dodging via third countries.
3/9
She continues: "By seeking Chinese agreement to impose export restraint in specified product areas, discouraging Chinese companies from transshipping their goods through third countries to the U.S. and reducing tariffs and nontariff measures in nonsensitive sectors, both...
Read 9 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


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

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

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

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

:(