Michael Pettis, an esteemed finance professor and author, shares his insights after spending over twenty years in China, teaching at premier universities and previously trading on Wall Street. He highlights the stark contrast between China’s robust manufacturing output and its subdued household consumption. In an exclusive interview, Pettis evaluates the current international trade landscape while reflecting on the vibrant past of Beijing’s arts scene.
A key issue troubling China’s economy is its weak domestic demand, particularly noted amidst an ambitious annual GDP growth target of around 5 per cent. Pettis emphasizes that this predicament revolves around the balance of consumption and investment. Historically, China’s growth has been heavily investment-driven, boasting an unparalleled share of GDP in investments. Even with a reduction in this share, China would still lead globally in investment rates.
Michael Pettis, a noted economist, discusses China’s economic challenges, focusing on its weak domestic demand contrasting with high investment. He reflects on the nuances of trade and China’s consumption paradox, pointing to the need for sustainable economic practices as the country aims for a GDP growth of around 5 per cent.
In summary, Michael Pettis articulates the pressing challenges within China’s economic structure, especially the reliance on investment over consumption. Understanding the implications of weak domestic demand is vital as it affects growth targets and the overall economic health. His reflections underscore the need for a reevaluation of trade dynamics and domestic consumption strategies to bolster China’s sustainable development in an increasingly competitive global landscape.
Original Source: www.scmp.com
