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Michael Pettis

@michaelpettis.bsky.social
13K followers 102 following 7.5K posts

Senior Fellow at Carnegie China. For speaking engagements, please write to chinfinpettis@yahoo.com

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Michael Pettis @michaelpettis.bsky.social · 6h
Here is my latest substack, a shorter version of my most recent Carnegie piece. michaelpettis858496.substack.com/p/the-plaza-...
michaelpettis858496.substack.com
The Plaza Accord and Global Imbalances
The Plaza Accord was originally meant to be part of a broader restructuring that Japanese economists and policymakers themselves recognized was necessary.
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Michael Pettis @michaelpettis.bsky.social · 7h
To my friends in Mexico, I will spend much of this coming week (October 5-9) in Mexico City and am open to setting up additional meetings with old friends or anyone in banking or government with a particular interest in China. Please let me know.
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Michael Pettis @michaelpettis.bsky.social · 26/09/2026
1/3 Biagio Bossone: "The IMF reads this as two separate domestic distortions needing two separate domestic fixes: Chinese fiscal expansion and US fiscal tightening. But the two are not separate stories. www.omfif.org/2026/09/the-...
omfif.org
The missing variable in the imbalances debate - OMFIF
IMF traces global imbalances back to domestic saving-investment gaps – weak Chinese investment and an over-spending US – rather trade policy
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Michael Pettis @michaelpettis.bsky.social · 26/09/2026
1/2 FT: "Brussels has warned Andy Burnham that Britain would need to raise tariffs on Chinese cars and align more closely with EU trade policy if it wants to avoid “made in Europe” barriers that would hit key exports." www.ft.com/content/5453...
ft.com
EU urges UK to raise tariffs on Chinese cars to avoid ‘made in Europe’ barriers
London has lobbied intensely to secure equal treatment for British products but continues to rule out a customs union
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Michael Pettis @michaelpettis.bsky.social · 26/09/2026
1/2 My newest Carnegie piece revisits the Plaza Accord and its relevance for China. The accord was not an externally imposed punishment on Japan but part of a broader restructuring that Japanese economists and policymakers themselves recognized was necessary. carnegieendowment.org/china-financ...
carnegieendowment.org
The Plaza Accord and Its Relevance for China
The Plaza Accord was not an externally imposed punishment of Japan but part of a broader restructuring that Japanese economists and policymakers themselves recognized was necessary. Its effects were u...
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Michael Pettis @michaelpettis.bsky.social · 24/09/2026
Usually when I share music on BlueSky, it is music from my friends in the Beijing scene, but Thelonious Monk is one of a handful of my favorite 20th-Century musicians, and this piece is so good (and Charlie Rouse so nuanced and perfect in it), that I had to share. youtu.be/yHKl0euhZI0?...
youtu.be
Thelonious Monk - Blue Monk (Norway, 1966)
YouTube video by The Jazz Estate
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Michael Pettis @michaelpettis.bsky.social · 24/09/2026
Caixin: "Total net outbound direct investment reached an all-time high of $213.58 billion last year, rising 11.1% from 2024." www.caixinglobal.com/2026-09-23/a...
caixinglobal.com
Analysis: China’s Outbound Investment Hits Record $214 Billion as Mega Deals Disappear
As cross-border takeovers plunge to a 17-year low amid Western regulatory walls, Chinese capital is pivoting to Asia to construct defensive, trade-linked supply chains
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Michael Pettis @michaelpettis.bsky.social · 24/09/2026
Former Mexican ambassador to Beijing, Jorge Guajardo, and prominent Colombian economist and banker, Bruce Mac Master, discuss what China means to the Latin American economy. www.youtube.com/watch?v=Lc5v...
youtube.com
En 30 años, China construyó una Europa entera, hoy necesita vender | Exembajador de México en China
YouTube video by Un Continente Posible
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Michael Pettis @michaelpettis.bsky.social · 24/09/2026
Cambridge's William Hurst argues that not all empty urban projects in China are the same, and that the differences among them imply a different distribution of political and economic costs.
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Michael Pettis @michaelpettis.bsky.social · 23/09/2026
Interesting substack by venture investor David Cheng on his recent China trip. earnedintuition.substack.com/p/involution...
earnedintuition.substack.com
Involution Without Export Is Wasted Effort
A week in Beijing and Shanghai with the people building AI in China
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Michael Pettis @michaelpettis.bsky.social · 23/09/2026
Scott Lincicome: "Dramatic changes to Chinese policy must come from Chinese officials. Washington unfortunately keeps giving them reasons not to change." www.bloomberg.com/opinion/arti...
bloomberg.com
The US Is Badly Losing Its Trade War With China
Xi Jinping’s arrival at the White House on Thursday will be the first Chinese state visit to the United States since 2015. It thus makes for the perfect time to judge the radical changes to US-China t...
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Michael Pettis @michaelpettis.bsky.social · 23/09/2026
1/3 Xijing Research Institute dean Zhao Jian: "For years, the conventional wisdom was that China’s economy was held hostage by its real estate sector. Today, Beijing faces a new, equally perilous predicament: an economy dangerously overreliant on exports." www.caixinglobal.com/2026-09-22/c...
caixinglobal.com
Commentary: Are Exports Holding China’s Economy ‘Hostage’?
Manufacturing competitiveness has cushioned the fallout from the property downturn and local-debt retrenchment. But a durable recovery will require Beijing to rebuild household confidence, consumption...
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Michael Pettis @michaelpettis.bsky.social · 23/09/2026
FT: "“I had thought that it was perhaps only towards 2030 that China would get up close to 40 per cent,” said Eskelund. “That of course also means that the imbalances are growing very, very considerably.”" www.ft.com/content/51c4...
ft.com
China’s share of global container exports soars to 40%
Rapid rise underscores economy’s reliance on trade and threat to trading partners, EU chamber says
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Michael Pettis @michaelpettis.bsky.social · 22/09/2026
1/6 SCMP: "Beijing should expand central government borrowing and accelerate local debt restructuring, as China’s relatively low price levels offer a rare window for stronger fiscal support to bolster demand, according to some prominent Chinese economists." sc.mp/yupro?utm_so...
sc.mp
Economists urge Beijing to act fast on local-level debt while prices remain low
Prominent advisers note importance of central authorities expanding borrowing to fund infrastructure before the current window of subdued inflation closes.
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Michael Pettis @michaelpettis.bsky.social · 22/09/2026
Bloomberg: "Chinese gold imports through August topped 1,000 tons, surpassing the total posted for the whole of 2025." www.bloomberg.com/news/article...
bloomberg.com
China’s Gold Imports Top 1,000 Tons on Strong Investment Demand
Chinese gold imports are at record levels this year, helped by a slump in international prices and a firmer yuan.
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Michael Pettis @michaelpettis.bsky.social · 22/09/2026
WaPo's David Lynch: "Anemic job growth has pushed more than 280 million Chinese into gig economy jobs, up 75 percent from 2019, according to the China New Employment Forms Research Center." www.washingtonpost.com/business/202...
washingtonpost.com
Why China’s economy may be headed for its worst year since 1991
Chinese influence is on the rise as President Xi Jinping arrives in D.C. this week, but millions of his citizens are stuck in dead-end jobs in a stagnant economy.
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Michael Pettis @michaelpettis.bsky.social · 21/09/2026
atlantico.fr/article/decr...
atlantico.fr
Réindustrialisation américaine et choc global : enjeux pour la Chine et l'Europe
Rééquilibrage mondial imminent : qui paiera le prix de la réindustrialisation américaine ?
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Michael Pettis @michaelpettis.bsky.social · 21/09/2026
1/2 NYT: "Economists in China — even those closest to the state — have openly warned that the government is pouring too many resources into a technology that creates relatively few jobs, while doing too little to save the broader economy." www.nytimes.com/2026/09/20/b...
nytimes.com
In China, A.I. Is Moving Forward While the Economy Lags Behind (Gift Article)
As Xi Jinping arrives in the United States this week for a state visit, China’s advances in artificial intelligence will be in the air. Less discussed: China’s economy in its worst shape in decades.
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Michael Pettis @michaelpettis.bsky.social · 21/09/2026
Former WTO head Pascal Lamy still prefers negotiated rebalancing to protectionism, but he now acknowledges that if China will not rebalance, European governments may be forced to implement protectionist tariffs. www.scmp.com/economy/glob...
scmp.com
Open Questions | ‘Trade is never free’: former WTO chief Pascal Lamy on the EU’s China challenge
He says Chinese authorities’ lack of interest in addressing structural macroeconomic imbalance a ‘huge problem’ for European Union.
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Michael Pettis @michaelpettis.bsky.social · 21/09/2026
More supply-side support: "China will accelerate efforts to identify and nurture promising small and medium-sized enterprises, shifting from waiting for companies to apply for support to proactively seeking out firms with strong growth potential." english.news.cn/20260921/a9c...
english.news.cn
China to step up proactive support for promising SMEs
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Michael Pettis @michaelpettis.bsky.social · 21/09/2026
1/7 Li Xunlei, Chief Economist at Zhongtai Financial: “The conclusion is clear: the places that built the most expressways were often those where freight demand grew the least.” www.eastisread.com/p/li-xunlei-...
eastisread.com
Li Xunlei on China’s Transport Overcapacity
A data-driven look across China’s expressways, high-speed rail, airports, and urban transit at excessive expansion, weak utilisation, and regional mismatches.
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Michael Pettis @michaelpettis.bsky.social · 20/09/2026
1/2 Caixin: "The onshore Chinese yuan strengthened past 6.7 per U.S. dollar on Friday to touch its highest level in more than three years, defying expectations of depreciation following the Federal Reserve’s latest interest rate hike." www.caixinglobal.com/2026-09-18/y...
caixinglobal.com
Yuan Surges Past 6.7 per Dollar to Three-Year High
Heavy corporate dollar sales and central bank guidance help the Chinese currency shrug off the Federal Reserve’s latest rate hike
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Michael Pettis @michaelpettis.bsky.social · 20/09/2026
Interesting Xinhua article on China's determination to expand its share of global manufacturing: "Defying intense pressures at home and abroad, China's manufacturing sector has forged ahead, accounting for nearly 30 percent of the global total." english.news.cn/20260918/45d...
english.news.cn
Xi Focus: Steering China's strides toward manufacturing powerhouse
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Michael Pettis @michaelpettis.bsky.social · 19/09/2026
I just finished Logan Wright's new book on the Chinese economy. It provides a great deal of data to support the claim that China’s enormous credit expansion is running out of room, leaving Beijing under growing pressure to rely on exports to keep economic activity from declining.
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Michael Pettis @michaelpettis.bsky.social · 19/09/2026
Bloomberg: "The deepening pullback in government spending partly explains the persistence of weak domestic demand in August, when consumption growth almost ground to a halt and investment continued to slump." www.bloomberg.com/news/article...
bloomberg.com
China’s Fiscal Pullback Stretches Into August as Spending Slumps
China’s public expenditure declined at a quicker rate in August, indicating the government was still withdrawing fiscal support for the economy despite cooling growth momentum.
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Michael Pettis @michaelpettis.bsky.social · 19/09/2026
Caixin: "China’s surveyed urban youth unemployment rate rose to 18.9% in August, matching the highest level since the current methodology was adopted in 2024." www.caixinglobal.com/2026-09-18/c...
caixinglobal.com
China’s Youth Unemployment Hits Record High
Youth joblessness rises as graduates enter the labor market, while unemployment among workers aged 30 to 59 remains stable
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Michael Pettis @michaelpettis.bsky.social · 19/09/2026
Interesting piece by Steven Randy Waldman on the costs to the global economy of persistently unbalanced trade, and why the best way of balancing it would be through capital account restrictions rather than trade account restrictions. www.liberalcurrents.com/rebalancing-...
liberalcurrents.com
Rebalancing Trade in a Fragmented International Order
Chapter 9 (pp. 62–77) from The Reconstruction Papers.
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Michael Pettis @michaelpettis.bsky.social · 18/09/2026
New Noise Magazine: "Signed to Maybe Mars, the label responsible for a huge chunk of China’s best indie output, Carsick Cars quickly became a name serious listeners and industry figures alike started paying attention to." newnoisemagazine.com/columns/pres...
newnoisemagazine.com
Pressed In Asia #20 : Carsick Cars – New Noise Magazine
Two decades in, Carsick Cars remains one of China's few indie bands still treated as a genuine international reference point.
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Michael Pettis @michaelpettis.bsky.social · 18/09/2026
Caixin: "A growing number of doctoral graduates from elite universities are bypassing traditional careers in academia and research to take jobs as secondary school teachers, driven by an oversupplied labor market and fierce competition for university posts." www.caixinglobal.com/2026-09-17/c...
caixinglobal.com
China’s PhD Glut Drives Top Graduates to High School Teaching Jobs
Elite graduates from universities like Cambridge and Tsinghua are opting for the stability and lucrative perks of secondary education as excessive competition and an oversupply of doctoral degrees upe...
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Michael Pettis @michaelpettis.bsky.social · 18/09/2026
Caixin: "Traditional bank loans have fallen to less than 60% of China’s total credit supply for the first time in seven years, as plunging interest rates drive corporate and government borrowers into the bond market." www.caixinglobal.com/2026-09-16/a...
caixinglobal.com
Analysis: Plunging Yields and Debt Swaps Are Rewiring China’s Credit Market
The shift reflects a prolonged low-interest-rate environment and Beijing’s sweeping local government debt-resolution plan, which are accelerating the transition toward direct financing
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Michael Pettis @michaelpettis.bsky.social · 17/09/2026
1/6 Yanliang Miao is right that it would be a mistake to assume that China’s economy is running out of steam simply because property and infrastructure investment are weakening. But I disagree with his suggestion that China can largely replace the old... www.imf.org/en/publicati...
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Michael Pettis @michaelpettis.bsky.social · 17/09/2026
1/4 "When China’s economy slows, its central bank reaches for a familiar remedy: make lending cheaper and easier so businesses invest, households spend, and demand picks up. In most economies, that stimulus eventually pushes prices higher." scceichinabriefs.substack.com/p/chinas-fin...
scceichinabriefs.substack.com
China’s Financial System Boosts Production but Bypasses Demand
As Chinese scientists working abroad increasingly return to China, the payoff for Chinese science has been deep and wide
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Michael Pettis @michaelpettis.bsky.social · 17/09/2026
1/4 Caixin: "China has unveiled a sweeping five-year plan for its electronic information manufacturing sector, aiming to boost the industry’s annual revenue beyond 30 trillion yuan ($4.5 trillion) by 2030." www.caixinglobal.com/2026-09-17/c...
caixinglobal.com
China Targets $4.5 Trillion Tech Manufacturing Sector by 2030
A newly unveiled five-year plan prioritizes breakthroughs in AI, advanced computing, and semiconductor supply chains to bolster industrial self-reliance
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Michael Pettis @michaelpettis.bsky.social · 16/09/2026
1/3 Bloomberg: "China has long called for consolidation to rein in production overcapacity, only for those efforts to fizzle. But a deal involving two state-owned companies is a sign that it may finally have found a way of tackling the problem of too many cars." www.bloomberg.com/news/article...
bloomberg.com
China Signals It’s Finally Starting to Tackle Glut in Car Market
China has long called for consolidation to rein in production overcapacity in the world’s biggest auto market, only for those efforts to fizzle. But a deal involving two state-owned companies is a sig...
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Michael Pettis @michaelpettis.bsky.social · 16/09/2026
1/6 Caixin: "China’s fixed-asset investment dropped 7.2% year-on-year in the first eight months of the year, underscoring the challenges facing the country’s difficult transition from debt-fueled expansion to high-tech manufacturing." www.caixinglobal.com/2026-09-15/c...
caixinglobal.com
China’s Investment Slump Deepens as Property Drag Overshadows Tech Shift
Eight-month drop misses estimates amid real estate woes and extreme weather, while Beijing highlights transition to quality over scale
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Michael Pettis @michaelpettis.bsky.social · 16/09/2026
Interesting analysis by former Canadian diplomat and China specialist Michael Kovrig on why Chinese state financiers came to Canada’s investment summit. michaelkovrig.substack.com/p/why-chines...
michaelkovrig.substack.com
Why Chinese state financiers have come to Canada’s investment summit
China Investment Corp, China International Capital Corp and the Hong Kong Monetary Authority are in Toronto to look for passive stakes, but political influence could follow
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Michael Pettis @michaelpettis.bsky.social · 15/09/2026
Currency intervention used to be what central banks did. As trade conflicts rise, however, and as explicit currency intervention becomes increasingly criticized, it seems that many countries are simply shifting the locus of currency intervention away from central banks. www.cfr.org/articles/de-...
cfr.org
De-reservification, Not De-dollarization | Council on Foreign Relations
The world isn’t moving away from the dollar. It is shifting its dollars from traditional reserves to state banks, pension funds, and other quasi-sovereign investors.
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Michael Pettis @michaelpettis.bsky.social · 15/09/2026
Lingling Wei: "Earlier this year, I put a blunt question to an adviser to China’s central bank: With the property bust grinding into its fourth year, how likely was it that the country’s strained financial system would finally crack into a full-blown crisis?" www.wsj.com/articles/chi...
wsj.com
China Can Avoid a Financial Crisis. It Can’t Avoid the Cost.
Plus, the U.S. accuses Chinese AI firms of exploiting American models and designates an American scholar held by China as wrongfully detained | WSJ China for Sept. 15.
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Michael Pettis @michaelpettis.bsky.social · 15/09/2026
1/3 Journalists who cover China must dread monthly data releases because they have to come up with new and interesting ways to say exactly the same thing: the supply side of the economy continues to do well while the demand side continues to weaken. english.news.cn/20260915/e06...
english.news.cn
China's retail sales of goods, services up 2.5 pct in first eight months
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Michael Pettis @michaelpettis.bsky.social · 15/09/2026
FT: "China has implemented sweeping new controls on overseas travel for Chinese citizens as President Xi Jinping steps up efforts to secure state secrets, advanced technology and highly skilled workers." www.ft.com/content/3f2b...
ft.com
China tightens control of overseas travel in sweeping new law
President Xi Jinping steps up efforts to secure state secrets, advanced technology and highly skilled workers
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Michael Pettis @michaelpettis.bsky.social · 14/09/2026
1/2 To my friends in Beijing, tomorrow night one of my favorite musicians and composers, Zhang Shouwang, will be performing at our music series in a collaboration with cellist Shen Jing. Their shows are always standouts.
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Michael Pettis @michaelpettis.bsky.social · 14/09/2026
1/2 FT: "But a French chief economist for the ECB combined with a Spanish president would be “hard to imagine” for Berlin, while Paris would probably block a Dutch president and a German chief economist." ft.com/content/8988...
ft.com
European capitals barter over Christine Lagarde’s successor at ECB
Eurozone governments are negotiating a ‘grand package’ over three of the central bank’s most senior roles
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Michael Pettis @michaelpettis.bsky.social · 13/09/2026
1/2 Caixin: "The global race to develop AI has largely been framed as a technological and financial triumph, promising to turbocharge productivity and reshape industries. Yet, as the initial euphoria settles, leading economists and industry executives are... www.caixinglobal.com/2026-09-11/a...
caixinglobal.com
AI Boom Could Undermine China’s Push for Consumption-Led Growth, Economists Warn
The technology could lift productivity and supply while weakening labor income, consumer demand and prices, posing a fresh challenge for Beijing’s plan to revamp its growth model
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Michael Pettis @michaelpettis.bsky.social · 13/09/2026
Caixin: "China has established a framework for determining when manufacturers are selling goods below cost, giving regulators a clearer basis for intervening in price wars. The move forms part of Beijing’s broader campaign against so-called involution." www.caixinglobal.com/2026-09-11/c...
caixinglobal.com
China Sets Cost Rules to Curb Industrial Price Wars
The NDRC and the market regulator have published a unified methodology to determine whether manufacturers are engaged in illegal low-price dumping
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Michael Pettis @michaelpettis.bsky.social · 13/09/2026
1/4 Caixin: "China’s top anti-graft watchdog and the Ministry of Finance have publicly identified several local officials for either adding new hidden government debt or overstating progress in resolving existing liabilities." www.caixinglobal.com/2026-09-12/c...
caixinglobal.com
China Names and Shames Local Officials Over Hidden Debt Violations
A joint circular from the anti-graft watchdog and the finance ministry details six typical cases of creating new hidden debt or falsifying debt resolution progress
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Michael Pettis @michaelpettis.bsky.social · 13/09/2026
According to Yicai, in the first eight months of the year, Beijing’s second-hand home sales rose 5.9 percent from a year earlier, reaching the highest level in five years, although, despite the rebound in sales, second-hand home prices continued to decline. www.yicaiglobal.com/news/beijing...
yicaiglobal.com
Beijing Home Sales Climb, Inventory Shrinks in Month After Policy Easing
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Michael Pettis @michaelpettis.bsky.social · 13/09/2026
1/2 Yicai: "Rents in China’s four first-tier cities, namely Beijing, Shanghai, Guangzhou and Shenzhen, have increased for six consecutive months since March", although, Yicai goes on to note, more than 100% of the net increase occurred in Shanghai and... www.yicaiglobal.com/news/chinas-...
yicaiglobal.com
China’s Top Cities See Rents Rise for Six Straight Months as Housing Demand Recovers
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Michael Pettis @michaelpettis.bsky.social · 12/09/2026
NYT: "For India, the imbalance creates a difficult problem. Its industrial ambitions depend heavily on Chinese goods, even as that dependence exposes it to strategic risks and makes it harder for its companies to gain the scale needed to compete with Chinese rivals." www.nytimes.com/2026/09/12/b...
nytimes.com
India Wants to Buy Fewer Chinese Imports, but Keeps Needing More
Trade between India and China has nearly doubled in five years, leaving New Delhi with a widening deficit and a difficult choice over how to build its industrial future.
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Michael Pettis @michaelpettis.bsky.social · 12/09/2026
One of the first Chinese movies I saw after I moved to Beijing in 2002 was Beijing Bicycle, a very good film about a Beijing that was in the midst of massive physical and social transformation. Here is a very interesting interview of its director, Wang Xiaoshuai. chinabooksreview.com/2026/07/30/w...
chinabooksreview.com
Wang Xiaoshuai on Chinese Cinema | China Books Review
The pioneering filmmaker discusses the past and future of China’s film industry, and what it feels like to be caught between the censors and the market.
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Michael Pettis @michaelpettis.bsky.social · 11/09/2026
1/3 SCMP: "HSBC estimated that lowering the high precautionary savings rate of migrant workers from 54% to 45% – closing half the gap with registered urban residents – could unlock 637 billion yuan in additional spending a year, equivalent to roughly 0.5% of annual GDP." www.scmp.com/economy/chin...
scmp.com
Improving migrant workers’ lives key to boosting Chinese consumption: HSBC
Report says reforms aimed at reducing their high precautionary savings rate could unlock US$95 billion a year in spending.
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