Michael Pettis

Nonresident Senior Fellow
Carnegie China
Pettis, an expert on China’s economy, is professor of finance at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets.
Education

MBA, Finance, Columbia University
MIA, Development Economics, Columbia University

Resources

China Financial Markets

    • China Financial Markets

    Should the United States Run a Trade Surplus?

    • March 04, 2019

    Although standard trade theory predicts that highly advanced economies with sophisticated financial sectors, like the United States, should generally run trade surpluses, the country has run persistent, and often large, trade deficits for five decades. This can only be a consequence of significant global economic distortions.

    • China Financial Markets

    Why U.S. Debt Must Continue to Rise

    • February 07, 2019

    Debt is rising more quickly in the United States than most people would prefer. This is happening in part because the U.S. current account deficit and the country’s high level of income inequality distort the structure and amount of American savings.

    • China Financial Markets

    What Is GDP in China?

    Analysts are increasingly skeptical that China’s very high reported GDP growth rate provides a meaningful picture of the economy’s health. There are, however, at least three very different ways that reported GDP can fail to reflect the underlying economy.

    • China Financial Markets

    What China’s Online Shopping Craze Says About Its Bubble Economy

    • November 14, 2018

    November 11, known in China as Singles’ Day, started out as a wry, tongue-in-cheek holiday. It has since become a major draw for online shopping, a profoundly Chinese celebration, and an expression of the country’s modern urban youth. But the rampant commercialization of Singles’ Day may one day come to be seen as a symbol of the era of China’s bubble economy.

    • China Financial Markets

    Beijing’s Three Options: Unemployment, Debt, or Wealth Transfers

    China’s debt problems have emerged so much more rapidly and severely this year than in the past that a growing number of analysts believe that this may be the year that China’s economy breaks. There is no question that China will have a difficult adjustment, but it is likely to take the form of a long process rather than a sudden crisis.

    • China Financial Markets

    The U.S. Trade Deficit Isn’t Caused by Low American Savings

    • August 08, 2018

    A recent article by Joseph Stiglitz suggests that the United States runs a current account deficit because its people save too little to fund domestic investment. In fact, he may have it backwards: Americans may save too little precisely because the United States runs a current account deficit.

    • China Financial Markets

    Tariffs and Trade Intervention

    • July 10, 2018

    Most of the discussions among economists about the impacts of tariffs and trade intervention are more ideological than logical. While tariffs may cause households to pay more for tradable goods, there are many other ways households, and the overall economy, are affected, positively and negatively. What matters are the conditions under which trade intervention policies are made.

    • China Financial Markets

    High Wages Versus High Savings in a Globalized World

    • April 03, 2018

    Democracies will increasingly have to choose between raising wages and redistributing income or maintaining free trade and capital flows. Because they are likely to choose the former, the world may face a long-term reversal of globalization.

    • China Financial Markets

    The GDP of Bridges to Nowhere

    • January 25, 2018

    In most economies, GDP growth is a measure of economic output generated by the performance of the underlying economy. In China, however, Beijing sets annual GDP growth targets it expects to meet. Turning GDP growth into an economic input, rather than an output, radically changes its meaning and interpretation.

    • China Financial Markets

    Why China Likely Won’t Buy Fewer U.S. Treasury Bonds

    • January 12, 2018

    A January 2018 Bloomberg article suggests that Chinese officials may reduce their purchases of U.S. government bonds. It is very unlikely that China can do so in any meaningful way because doing so would almost certainly be costly for Beijing. And even if China took this step, it would have either no impact or a positive impact on the U.S. economy.

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