China SOE Profits and Taxes Slip Despite Modest Growth
Xinhua: "China's SOEs saw their total revenue rise 0.2 percent year on year in the first two months of 2026, while total profits fell 2 percent and total tax payments fell 2.3 percent." This in an economy that grew nominally by around 4% last year. https://t.co/c5wmvwlZo4
WTO's Yaoundé Setback Signals Need for Fundamental Reform
1/9 The FT argues that the WTO was further wounded in the recent Yaoundé meeting. This was probably inevitable. Unless the WTO arranges a transformation of its role in global trade, it is hard to see its continuing relevance. https://t.co/1Xy5w1ESZZ
BoE Warns Industrial Policy Can Fuel Harmful Trade Surpluses
The Bank of England continues to be among the few major central banks to warn about the adverse effects of persistent trade imbalances. Although most models used by economists assume that trade is balanced, or is unbalanced only temporarily before...
CITIC's 2025 Record Profits Fueled by Trading Gains
For those interested in how members of the "national team" may have performed in the current stock market rally, Caixin notes the CITIC posted record-high revenues and profits in 2025, driven by proprietary trading and "financial investment". https://t.co/KXtyuP8mil
Xi's Push for Intensive Growth Faces Execution Hurdles
Good Damien Ma piece on Xi Jinping's efforts to shift the Chinese economy from extensive growth (generate growth by increasing labor, capital and resource inputs) to intensive growth (generate growth by using labor, capital and resource inputs more efficiently). For...
Two Distinct Causes Behind Last Year's Manufacturing Job Decline
1/5 Good Chris Griswold piece on the implications of the decline last year in manufacturing jobs. I would add one other thing, and that is that there are two completely separate reasons for a decline in manufacturing jobs.
China Mulls Loosening Investor Limits to Aid Banks
Reuters: "China is considering easing shareholding restrictions for some major investors, people with knowledge of the matter said, in a move aimed at broadening capital-raising options for commercial banks reeling from an economic slowdown." https://t.co/HCdl6eFRCX
Singapore Sees China as Engine for Regional Growth
1/6 Bloomberg: "“Singapore believes China can play a bigger role in supporting regional prosperity and stability,” Singapore Prime Minister Lawrence Wong said at the Boao Forum. “Its vast domestic market can be a powerful engine of growth for the region.” https://t.co/npbm7nXQEo
China Claims Right to Counter Mexico's Tariff Hikes
1/9 Reuters: "China said that Mexico's trade measures against it, including tariff increases, constitute trade and investment barriers and that it had the right to take countermeasures." rld/china/china-says-it-has-right-retaliate-against-mexicos-tariff-hikes-2026-03-25/
China’s Growth Model Hinges on Weak Consumption, Excess Investment
The East is Red provides a translation of a very interesting essay by Wang Xiaolu, Deputy Director of the National Economic Research Institute. The problem with the Chinese economy, Wang says (and as I have argued for over a decade), is...
Fed Says China's Exports Driven by Constrained Household Consumption
1/5 This new paper by the Fed concludes that China's export success stems from weak domestic demand "rooted in structural features of China's economy and financial system—particularly those that constrain household consumption." https://t.co/jplDeN5d6g
Dollar’s Global Dominance Fuels US Deficit Persistence
Joseph Gagnon: "The most persistent driver of US deficits is the attractiveness of US financial assets to foreign investors owing to the central role of the dollar in international transactions and to the perceived safety and creativity of US financial...
Chinese Automakers Outsell Japanese Rivals Globally for First Time
Xinhua: "Chinese automakers have surpassed their Japanese counterparts in global vehicle sales for the first time, marking a significant shift in the global automotive industry." https://t.co/PtNMiJISii
PBoC Governor Says Global Deficits Unchanged in 40 Years
1/4 I am a little surprised by these comments from the governor of the PBoC. According to Yicai, yesterday he said that "the world’s major deficit countries are the same as 40 years ago because of the inherent flaws in the...
IMF Urges China to Boost Consumption, Cut Subsidies
IMF First Deputy Managing Director Dan Katz: "China can do more to increase consumption and domestic demand—especially for services—by boosting household incomes and reducing incentives for precautionary savings. That means shifting resources away from industrial subsidies and infrastructure." https://t.co/2Rvhxa5jsN
European Trade Pressures Analyzed in New Spanish Article
A recent piece by Enrico Fardella and me on European trade pressures, translated into Spanish by Agenda Publica https://t.co/5AEY665Tjb
China's Premier Acknowledges Trade Surplus Amid Export Surge
1/4 Bloomberg: "Chinese Premier Li Qiang has responded to growing calls from trading partners to address a rising trade surplus, with China’s exports continuing to surge in the first two months of the year." https://t.co/EMOs1RWaAX
Princeton Keynote Explores Debt, Deficits, Global Imbalances
Four weeks ago I was a keynote speaker at Princeton's Annual JRCPPF Conference. The topic this year was "Debt, Deficits & Global Imbalances". For those who might be interested (and there were some brilliant presentations), this video provides the links. https://t.co/BhKUkeJVQb
Over Half of Chinese Car Dealers Lose Money in 2025
Caixin: "The China Automobile Dealers Association said in a report that 55.7% of dealerships lost money last year, up 14 percentage points from 2024, as intense competition forced them to sell vehicles below cost." https://t.co/5TsYQRNMxx
Chinese Automakers Target 2026 Overseas Sales to Counter Domestic Slump
Caixin: "Major Chinese carmakers are setting ambitious overseas sales and localized production targets for 2026 to offset a cooling domestic market." https://t.co/P0EUxL3lEN
China's Trust Sector Abandons Risky Real‑Estate Debt Model
Caixin: "Driven by a regulatory crackdown on risk in the financial system, China's multitrillion-dollar trust industry is being forced to abandon its old, highly profitable model of funneling funds into non-standard debt for real estate projects and local governments." https://t.co/eN5eDafjR4
China, US Pledge New Mechanisms to Boost Trade
People's Daily: "China and the US agreed to explore the establishment of working mechanisms to expand economic and trade cooperation, continue to make good use of the China-U.S. economic and trade consultation mechanism, strengthen dialogue and communication, properly manage differences,...
China's Fixed-Asset Investment Grows 1.8% Early 2024
1/8 Caixin: "China’s fixed-asset investment (FAI) returned to growth in the first two months of this year, rising 1.8% year on year, beating expectations as infrastructure spending jumped." https://t.co/cCOIgPDXNn
New Interview Reveals Outlook for China's Economy
I was interviewed two weeks ago by Mark Sobel at OMFIF about the outlook for the Chinese economy. It just came out. https://t.co/d6LFlYcl14
EU Urged to Leverage Market for Concessions From Fragile China
1/6 SCMP: "The European Union has been urged by the EU’s official think tank to weaponise its giant market to draw concessions from China, whose economic fragility is making it increasingly reliant on rich export markets." https://t.co/haMEakKlUZ via @scmpnews
China's CPI Surges, Deflationary Trend Reverses
1/6 China's deflationary environment continues to improve, with high-than-expected numbers in February. CPI inflation was 1.3% year on year and 1.0% month on month. Month-on-month inflation has been positive since December and mostly positive since July. https://t.co/gpaBJ53yli
Global Debt Hits Record High, Driven by China, US
SCMP: "Global debt climbed to a record high in 2025, rising at the fastest pace since the pandemic, with China and the United States accounting for a large share of the increase, according to a new report." https://t.co/GSQFwnXnb0
Shanghai Loosens Homebuying Rules to Combat Property Slump
Bloomberg: "Shanghai eased homebuying rules, in the latest attempt by authorities to contain the nation’s prolonged property slump." https://t.co/7gAmMs7Onw
Yuan Deposits Rise, Household Growth Slows, Non‑bank Surge Persists
Yicai: "Chinese yuan deposits saw strong year-on-year growth in January, but the pattern of slower household deposit growth alongside faster non-bank deposit growth persisted. Industry insiders said this does not mean that money is leaving the banking system, nor does...
Spring Festival 2026 Consumer Sales Jump 13.7% YoY
1/3 Xinhua: "According to China's value-added tax invoice data, the 2026 Spring Festival holiday saw the average daily sales revenues of consumer-related industries increase by 13.7 percent from last year's Spring Festival holiday." https://t.co/kWT8ZTr29T
China’s USD Pullback Demands over $100B Monthly Liquidity
Setser: "$100b a month is a large sum, it had to go into a fairly liquid corner of the market". And of course if on top of this China really were reducing its exposure to USD assets, we would need more...
China’s Lunar New Year Spending Modestly up Amid Stimulus
SCMP: "Consumer spending during China’s Lunar New Year rose modestly this year, according to early official data, as authorities extended the holiday and stepped up stimulus measures to support domestic demand." https://t.co/d5LzFaVd4V via @scmpnews
Universal Tariff Beats Currency Devaluation for Trade Balance
The irony is that to reduce trade imbalances, tariffs should mostly substitute for currency devaluation, in which case a single, universal tariff is likely to be far more effective than a hodgepodge of bilateral and sectoral tariffs. https://t.co/QVpoGNLwuH
Countries Subsidize Exports, Cutting Domestic Consumption to Offset US Tariffs
1/4 As this WSJ article points out, countries are keeping their exports competitive in the face of US tariffs by increasingly subsidizing them, with the subsidies ultimately being paid for in the form of suppressed consumption. https://t.co/phOREv8G8z
China’s Top Solar Firms Slash One‑third Staff Amid Losses
1/7 Reuters: "China's biggest solar firms shed nearly one-third of their workforces last year, company filings show, as one of the industries hand-picked by Beijing to drive economic growth grapples with falling prices and steep losses." https://t.co/BDS9UWJaXO
Accelerating Trade Imbalances Will Deepen Global Tensions
Good PIIE paper by Tamim Bayoumi and Joseph E. Gagnon on the consequences of accelerating trade imbalances. They warn that trade tensions are likely to get worse, something I have been saying for years and continue to say. I don't...
China’s Overlapping Industries Amplify Industrial Policy Impact
Kyle Chan: "China’s strength across multiple overlapping industries creates a compounding effect for its industrial policy efforts." https://t.co/1Z2o8dcRWq
German Firms Decry China's Unfair, Destabilising Trade Practices
Reuters: "German businesses warned of what they called destabilising and unfair global business practices by China, accusing Beijing of driving overcapacity, massive subsidies, distortive foreign-exchange policies and politically motivated export controls. https://t.co/701kYKGi2T
97% of Chinese Megacities Now Have High‑speed Rail
SCMP: "High-speed rail services are already accessible in 97 per cent of Chinese cities with populations of more than 500,000, the State Council said in December." https://t.co/bD3P6HUata
China‑Africa Trade Hits $348B, Chinese Exports Surge
According to the China Global South Project, in 2025, trade between China and Africa reached $348 billion, a 17.7% increase from 2024. Chinese exports to Africa rose 25.8% to $225 billion, while African exports to China rose 5.4% to $123 billion. https://t.co/RFFOLMKVsP
Protecting Domestic EVs Requires Tariffs or Local Content Rules
Very good Rhodium piece on the cost advantage of Chinese EVs: “In practice, countries seeking to protect domestic industries have two broad options. One is to impose very high tariffs that account not only for subsidies but also for structural...
China’s Growth Model Shift Faces Deep Structural Hurdles
Now that there is a consensus on what has caused the imbalances and why they are so damaging to China and to the global economy, we have to begin to understand just why it will be so difficult for China...
China’s Hidden Subsidies Dwarf IMF’s 4% Estimate
FT: “The IMF estimated that China spends about 4 per cent of its GDP subsidising companies in critical sectors, and said it should reduce that by 2 percentage points in the medium term.” This is a start, of course, but just...
Neoliberalism Crafts Rules to Shield Global Capitalism From Democracy
I just finished Quinn Slobodian's fascinating book on the parallel evolution of globalization and neoliberalism, with the former (according to the latter) requiring specific rules and institutions to "protect" global capitalism from democratic political pressures. While he focuses very heavily...
2025 Year-End Bonuses Shrink, Uneven Amid Economic Slowdown
1/2 SCMP: "Long viewed by Chinese employees as a barometer of corporate prospects, industry momentum and even the broader economy, the year-end bonus packages for 2025 have become smaller, rarer and far more unevenly distributed, amid slowing... https://t.co/MFbnMtmZdY
US Controls Slow China, Ignite Homegrown Chip Drive
NYT: "While Washington’s export controls have slowed China’s chip development, they have added fuel to Beijing’s decade-long push to make strategic technologies like semiconductors and A.I. entirely at home." https://t.co/OcHRXob06N
WTO Warns China's $1.2T Surplus Unsustainable, Urges Model Shift
1/2 AFP: "WTO chief Ngozi Okonjo-Iweala on Friday urged China to change its growth model, arguing that its soaring trade surplus risked sparking new trade barriers. “The $1.2 trillion trade surplus is not sustainable because the rest of the world cannot... https://t.co/fvOrE6LYBH
EU Trade Surplus Shrinks as Tariffs and China Pressure
1/5 Reuters: "The EU's trade surplus kept shrinking, data showed on Friday, as tariffs weighed on exports to the U.S. and rising Chinese imports crowded out domestic production, highlighting existential threats to the bloc's economic model." https://t.co/91sJO2nGjP
Provincial Revenues Forecast 2‑3% Growth, Lagging Economy
1/4 SCMP: "Major provinces are budgeting for 2 to 3 per cent growth this year in general public operating revenue, broadly in line with last year but below broader economic growth targets, Fitch Ratings said in a research note." https://t.co/HwyAPw042O
China Cracks Down on Hidden Corporate IOU Market
1/3 Very interesting Caixin article on attempts by Chinese regulators to get their arms around "the opaque market for corporate IOUs that has allowed big-name companies to defer payments to suppliers on a massive scale." https://t.co/FIJywKAtIX