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Michael Pettis on What Evergrande Means for China’s Macro Economy

Oct 11, 2021

Michael Pettis, a finance professor at Peking University and a senior fellow at the Carnegie Endowment for International Peace, dives into the cascading effects of the Evergrande crisis on China's economy. He discusses the crucial relationship between real estate and GDP, and the implications for household wealth and consumption. Pettis also highlights the challenges of transitioning from a debt-heavy growth model to a more sustainable one, alongside the complexities of income inequality and the potential for redistributing wealth amid significant political obstacles.

51:57

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Episode guests

Michael Pettis

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Episode notes

Intro

2min

China's Property Crisis and Economic Policy

19min

Redistributing Wealth in China's Economic Landscape

3min

China's Economic Crossroads

21min

China's Economic Crossroads: Evergrande's Impact

5min

Navigating China's Economic Labyrinth

5min

Exploring the Uncertainties of China's Economic Future

3min

The implosion of Evergrande continues. And nobody knows exactly how the losses will be distributed. What will be the impact on creditors or people who have put down payments on homes that haven't been built yet? And what will the ripple effects be on other credits? In addition to the financial fallout, there's also a macro angle. Real estate is extremely important to the Chinese economy for all kinds of reasons. And what happens in China has effects on all of its trading partners. To explain what comes next, we spoke with Peking University Finance Professor and Senior Carnegie Fellow Michael Pettis.

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