China's Consumption Conundrum

By  Michael Pettis

May 14, 2009

Economic Outlook

China's extraordinary lending boom already is raising the specter of another nonperforming loan crisis like the 1990s. With $670 billion in net new lending for the first quarter of 2009 -- total loans grew 15% in just three months -- many commentators have wondered where all the money is going. But too little thought has been given to what this will mean for the course of the country's broader economic reforms. The short answer is, a lot....

The Coming China Meltdown

By  Michael Pettis

Feb 28, 2009

Financial & Capital Market

If China continues to force excess capacity onto a struggling world, it could result in a trade war. ...

This is not the time to attack China

By  Michael Pettis

Feb 17, 2009

Financial & Capital Market

Last week's trade numbers from China could not have been more dismal. After declining by 2.8 per cent year on year in December, China's exports plummeted 17.5 per cent in January, placing huge pressure on the country's manufacturing sector. Already unemployment in China is surging. Chinese import ...

I still think its money, not pork, and I think credit is contracting very rapidly

By  Michael Pettis

Dec 13, 2008

Strategies

In all the worry about the trade numbers I haven’t discussed another data release last week which, until recently, would have been the most important piece of economic news for me.  It was only a few months ago that we were intensely debating the cause of rising inflation in China. Now, ...

China's exports contracted in November

By  Michael Pettis

Dec 9, 2008

Strategies

After trading up four days in a row, with the SSE Composite closing on Monday at 2091, up 3.6% for the day, the market turned today and the SSE Composite lost 2.5% to close at 2038, less than one point off its intra-day bottom.  What drove the four good days ...

Is China experiencing dollar outflows?

By  Michael Pettis

Dec 3, 2008

Strategies

The government was actively buying stocks today and as a result, not surprisingly, the market surged on hopes that they are serious about putting an end to the bear market.  After declining yesterday by 0.3%, the SSE Composite jumped 76 points today to close the day at its high of ...

China isn’t losing its competitive edge

By  Michael Pettis

Dec 1, 2008

Strategies

The stock market had a decent day today, with the SSE Composite rising 1.25% to close at 1895.  Bad news about manufacturing was overshadowed by an announcement that the government will expand a plan to subsidize household appliance purchases by farmers.  That helped appliance manufacturers, who led the market up. ...

More downward revisions

By  Michael Pettis

Nov 27, 2008

Financial & Capital Market

The Citibank rescue Monday caused markets around the world to surge, but China was buying none of it. Yesterday the SSE Composite dropped 3.7% and, after a morning rally, it declined a further 0.4% today to close at 1889. The economic news continues to be bad and it is hard to find ...