Up Shibor Creek

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In The Media

Up Shibor Creek

Overinvestment in China is creating debt problems, an experience that is similar to other historical investment-led growth miracles.

By Michael Pettis

Published on Jul 12, 2013

Source: Financial Times

Carnegie's Michael Pettis joined the Financial Times' Alphavilla podcast with Cardiff Garcia, Kate MacKenzie and David Keohane to discuss China's growth rate, the Shibor spike and associated drive to constrain credit growth, and the risk of social unrest and the dangers of social control.

This podcast was originally published by the Financial Times.

About the Author

Michael Pettis

Nonresident Senior Fellow, Carnegie China

Michael Pettis is a nonresident senior fellow at the Carnegie Endowment for International Peace. An expert on China’s economy, Pettis is professor of finance at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets.

Recent Work

Commentary
The Plaza Accord and Its Relevance for China
- Michael Pettis
Commentary
Who Paid for China’s Last Debt Cleanup, and Who Will Pay for the Next?
- Michael Pettis

Economy Trade East Asia China

Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

More Work from Carnegie China

Commentary
China Financial Markets
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 undermined, however, when Tokyo responded to the resulting slowdown with policies that exacerbated investment, credit expansion, and the very imbalances the adjustment was intended to resolve.
Michael Pettis
Paper
Untangling the Nuclear Knot: A Constructive Agenda for Managing China’s Nuclear Relations with the United States and Its Allies
The nuclear relationship between China and the United States is increasingly shaped by widening perception gaps rather than deliberate strategic design.
Tong Zhao
Commentary
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Who Paid for China’s Last Debt Cleanup, and Who Will Pay for the Next?
China’s banking crisis in the 2000s was resolved by transferring the costs to households through financial repression—a decision that recapitalized the banks while exacerbating the structural imbalances that continue to shape the Chinese economy today.
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Commentary
Caught in the Middle: Chinese Biotech Firms’ Divergent Responses to U.S. Sanctions
Chinese biotech companies have been on the receiving end of U.S. economic coercion. Yet their responses have differed significantly because firm and state interests are not uniformly aligned. For Washington, treating all Chinese tech firms the same, irrespective of their actual interests, risks pushing them farther into Beijing’s corner.
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Are Data Centers the Solution to China’s Renewables Excess Capacity?
China’s latest energy plan explicitly calls for integrating data centers into the electricity system, particularly connecting them to green energy. It appears Beijing wants to use compute as a source of domestic demand to absorb renewables excess capacity.
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More Work from Carnegie China

Commentary

China Financial Markets

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 undermined, however, when Tokyo responded to the resulting slowdown with policies that exacerbated investment, credit expansion, and the very imbalances the adjustment was intended to resolve.

Michael Pettis

The nuclear missile formation passes through Tian'anmen Square during a military parade on September 3, 2025 in Beijing, China.

Paper

Untangling the Nuclear Knot: A Constructive Agenda for Managing China’s Nuclear Relations with the United States and Its Allies

The nuclear relationship between China and the United States is increasingly shaped by widening perception gaps rather than deliberate strategic design.

Tong Zhao

Commentary

China Financial Markets

Who Paid for China’s Last Debt Cleanup, and Who Will Pay for the Next?

China’s banking crisis in the 2000s was resolved by transferring the costs to households through financial repression—a decision that recapitalized the banks while exacerbating the structural imbalances that continue to shape the Chinese economy today.

Michael Pettis

Robot arm with disposable test tube virus sampling in laboratory

Commentary

Caught in the Middle: Chinese Biotech Firms’ Divergent Responses to U.S. Sanctions

Chinese biotech companies have been on the receiving end of U.S. economic coercion. Yet their responses have differed significantly because firm and state interests are not uniformly aligned. For Washington, treating all Chinese tech firms the same, irrespective of their actual interests, risks pushing them farther into Beijing’s corner.

Xue Gong

An aerial drone photo taken on June 4, 2026 shows a wind-photovoltaic power storage station of Huadian Inner Mongolia New Energy Co., Ltd. as part of the Horinger data center cluster green energy supply demonstration project, in Hohhot, north China's Inner Mongolia Autonomous Region.

Commentary

Are Data Centers the Solution to China’s Renewables Excess Capacity?

China’s latest energy plan explicitly calls for integrating data centers into the electricity system, particularly connecting them to green energy. It appears Beijing wants to use compute as a source of domestic demand to absorb renewables excess capacity.

Damien Ma