Michael Pettis
@michaelxpettis
Senior Fellow, Carnegie Endowment.
For speaking engagements, please contact me at chinfinpettis@yahoo.com
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I would add that Tsinghua University's Li Daokui recently noted that "Using the term "K-shaped divergence" creates the false hope that the upward arm of the "K" can pull up the entire economy. This misdirects our focus. We must recognize that single upward trajectory cannot carry the weight of the entire economic base."
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Martin Wolf: "We are living in a mercantilist era. This threatens both the stability of the world economy and relations among great powers."
Just 3-4 years ago this would have still been considered an outrageous statement. It shows the extent to which the global trading system has come under pressure in the past 10-15 years.
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Caixin: "China’s monthly auto exports topped 1 million units for the first time in June, as automakers stepped up overseas shipments amid intensifying pressure at home. Exports jumped 75.1% from a year earlier to 1.04 million vehicles."
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This is becoming an increasingly important story: "A Chinese thin tank estimates the number of people in flexible employment - without a permanent full-time contract - rising to 320 million this year from 280 million in 2025, about 44% of China's workforce. China's gig economy has become a crucial employment buffer as the property crisis wipes out construction jobs and manufacturers shed workers through automation and cost-cutting amid tariffs, overcapacity and price wars."
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Xinhua: "Profits of China's major industrial firms increased 18.2% year on year during the January-April period, surpassing a rise of 15.5% in the first quarter."
Total profits are low but rising rapidly, balancing the lagging growth in wages.
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According to Reuters, domestic car sales in China were down 21.6% year on year in April, even as car exports surged 80.2%. Everyone knows that domestic demand remains incredibly sluggish in China, but such sharp drops in domestic car...
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