Pettis on China

Tuesday, September 22nd, 2009

Michael Pettis, professor of finance at Peking University’s Guanghua School of Management and author of the China Financial Markets blog, has just been interviewed by the Geoff Dyer, FT’s Beijing Bureau Chief on a number of China-related issues. The three-part interview is not only topical, but also excellent viewing material.

Part 1:

Pettis discusses where China may diversify its foreign exchange reserves and whether the renminbi will become the global reserve currency.

Click here or on the image below to view the video.

Part 2:

Pettis discusses the lessons other countries can learn from China’s growth model and its handling of the financial crisis.

Click here or on the image below to view the video.

Part 3:

Pettis discusses the pros and cons of the “Asian development model” and the future of US-China trade relations.

Click here or on the image below to view the video.

Source: Geoff Dyer, Financial Times, September 21, 2009.

Tags: Asian Development, Beijing, Bureau Chief, China Trade Relations, Development Model, Finance, Financial Crisis, Financial Markets, Financial Times, Foreign Exchange Reserves, Geoff Dyer, Growth Model, Guanghua, Michael Pettis, Peking University, Pros And Cons, Renminbi, Reserve Currency, School Of Management, Video Source
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Rx for China: US Recession

Saturday, January 5th, 2008

Finally, The Economist has published a story, An Old Chinese Myth, which confirms the decoupling of Asia ex-Japan is actually real. A recession in the US is welcome in China, as it will help to moderate China’s growth at the margins, something that its macro-economic policy has not had much success in doing. In any event the article is a good read, and if you are investing in China, this is welcome news for you too.

An American downturn will cause China’s economy to slow. But the likely impact is hugely exaggerated by the headline figures of exports as a share of GDP. Dragonomics forecasts that in 2008 the contribution of net exports to China’s growth will shrink by half. If the impact on investment is also included, GDP growth will slow to about 10% from 11.5% in 2007. This is hardly catastrophic. Indeed, given Beijing’s worries about the economy overheating, it would be welcome.

The American government frequently accuses China of relying excessively on exports. But David Carbon, an economist at DBS, a Singaporean bank, suggests that America is starting to look like the pot that called the kettle black. In the year to September, net exports accounted for more than 30% of America’s total GDP growth in 2007. Another popular belief looks ripe for reappraisal: it seems that domestic demand is a bigger driver of China’s growth than it is of America’s.

With China’s true export-to-GDP ratio at under 10%, and NOT as high as the Headline exports-to-GDP ratio of 37%, a US slowdown would perhaps have the impact of an interest rate hike on the Chinese economy. This may just what the doctor ordered in China’s case. 

Tags: American Government, Asia, Beijing, China, China Economy, China S Economy, Chinese Economy, Chinese Myth, Decoupling, Downturn, economic policy, Economist, Economy, Emerging Markets, GDP, GDP Growth, Gdp Ratio, Interest Rate Hike, Investing In China, Investment, Japan, Margins, Popular Belief, Recession, Singapore, Slowdown, Us Slowdown, Welcome News
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