Bloomberg - 26 Nov 2017
Pettis, one of the most astute economists writing about China, goes against the consensus advice of international organizations by arguing why liberalization might hurt, not help in the battle against debt. His argument is twofold: (1) China must deleverage by forcing local governments to liquidate assets and assign part of the proceeds to debt reduction, (2) opening up the financial sector would only further accommodate distortions and worsen the misallocation of investment (reads in 7-9 min).
Published in Weekly selection 1 December 2017
Project Syndicate - 14 Nov 2017
For those unfamiliar with China’s economics and politics, this article does a good job of taking stock of what happened at the 19th Party Congress and of explaining what lies ahead with a 30-y time horizon. The vision is clear: China wants to become a high-income economy by 2035. The main stumbling blocks are: income and wealth inequalities, and aging (by 2050, 36.5% of China’s population will be over the age of 60) (reads in 5-7 min).
Published in Weekly selection 24 November 2017
Foreign Policy - metered paywall - 26 Oct 2017
The Chinese government is taking quiet steps to bring Saudi Arabia’s hydrocarbon reserves firmly into its orbit. It has already expressed interest in a direct purchase of 5% of Saudi Aramco, and will want oil to be traded in yuan. This is a long-term game that will in turn increase global demand for yuan-denominated assets. The dollar’s monopoly on major oil sales may loosen gradually - and then suddenly (reads in 7-9 min).
Published in Weekly selection 27 October 2017