The Economics Show China’s economy vs the world. With Michael Pettis
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Sep 24, 2025 
In this enlightening discussion, Michael Pettis, a senior fellow at the Carnegie Endowment and former founder of a Chinese indie record label, dives into the complexities of China's economy. He explores how China's growth model has fostered unprecedented savings and investment yet led to cycles of overcapacity. Pettis examines the misconceptions outsiders have about China's structure, the implications of its trade policies on U.S. deficits, and the challenges the nation faces in escaping the middle-income trap. He also shares insights on music and book recommendations.
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Underground Label Founder In China
- Michael Pettis founded a major Chinese indie record label and later a new experimental label with musician friends.
- He also ran well-known music clubs in Beijing and New York, embedding himself in China's music scene.
China Fits Historical Developing Patterns
- China resembles other developing countries historically, not an exception to economic history.
- Local governments and elites wield significant power, limiting total central control.
High Savings Fueled Rapid Investment
- China grew via very high savings funding very high investment, suppressing consumption growth relative to GDP.
- By 2010 China reached historically unprecedented savings rates that powered rapid investment-led growth.
