Asia Times Online :: Germany's 'success' poses threat to China

China Business

Jul 16, '13

MICHAEL PETTIS
Germany's 'success' poses threat to China

Beijing-based economist Michael Pettis has carved out through his "China Financial Markets" blog a distinct position with his commentaries on the Chinese economy, notably with his consideration of the difficulties it faces with its necessary rebalancing towards a more consumption-based model. Asia Times Online here draws the attention of Pettis' latest insightful analysis to a wider public.

Germany is currently running the largest trade surplus in the

world, and is hoping to foist its imbalances onto the rest of the world now that the rest of Europe is too sick to absorb them.

In China the good news is that its economic rebalancing process seems to have become more determined than ever before, although as of yet there has been minimal rebalancing at the expense of a significant reduction in growth rates. This I expect will continue to be the case, but European trade policies are going to put additional pressure on China's adjustment. ... more

Michael Pettis is a Senior Associate at the Carnegie Endowment for International Peace and a finance professor at Peking University's Guanghua School of Management, where he specializes in Chinese financial markets. He has taught, from 2002 to 2004, at Tsinghua University's School of Economics and Management and, from 1992 to 2001, at Columbia University's Graduate School of Business. He is also Chief Strategist at Guosen Securities (HK), a Shenzhen-based investment bank.

(Reprinted with permission. For Michael Pettis' blog, see here.

(Copyright 2013 Michael Pettis.)

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