China could face similar economic strains seen in 2008-09, Michael Pettis notes - Traders Union
China could face similar economic strains seen in 2008-09, Michael Pettis notes - Traders Union
Source: Traders Union
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DW NOTE
Pettis has been making versions of this call since 2012. China's structural problems are real — overcapacity, debt-to-GDP above 280%, collapsing property sector — but the 2008 analogy misses the point: Beijing doesn't face a liquidity crisis, it faces a demand crisis it refuses to solve because doing so would require transferring wealth from the state to households.