Yicai: "China is expected to surpass the United States in operational nuclear power capacity before 2030, becoming the world’s largest, as the country accelerates reactor construction and investment."
www.yicaiglobal.com/news/china-s...
SCMP: "The jobless rate for the 16-to-24 age group, excluding students, edged up to 16.9 per cent in March from 16.1 per cent in February, snapping six straight months of decline."
The big increase, of course, typically happens in June, when school ends.
sc.mp/ia6r8?utm_so...
Very sorry to hear about this. Shortly after I finished reading his brilliant three-volume biography of Keynes, perhaps 15 years ago, I met him at a conference in Brazil. We became friends after that and met several times, mostly in London but also in Beijing.
www.thetimes.com/uk/obituarie...
2/2
It was used to mean competition so intense that it wiped out profitability, discouraged private investment, and created instability in key industries. It also led to financial fragility because of the associated dependence of Japanese companies on unlimited access to easy credit to stay alive.
1/2
For those interested in what Japan's recent economic history may tell us about other economies that copied its growth model, it's worth noting that in Japan, the term “excess competition” (過当競争, katō kyōsō) emerged, mostly in the 1960s, to express what was seen at the time as an urgent problem.
6/6
For example, if lower payroll taxes worsen the funding gap in the pension system, might Chinese households response by increasing precautionary saving? Or should a cut in payroll taxes further raise China's already-high fiscal deficit?
5/6
productivity growth, this will make one or the other two sectors worse off.
It is not enough, in other words, to discuss ways to increase the household share of GDP. More important is to explain how the cost is to be transmitted to the rest of the economy.
4/6
That is the problem that policymakers and advisors still aren't discussing. Increasing the share of total income that goes to the household sector requires transfers either from the business sector or from the government, and without a (very unlikely) surge in...
3/6
Notice however that unless the cut in payroll taxes were matched by higher taxes on households or businesses, or by cuts in spending to either sector, a reduction in payroll taxes would have to be balanced dollar for dollar by more government debt.
2/6
This would certainly work, as would any other policy that increases the disposable income of average Chinese households relative to GDP. China's extraordinarily low consumption share of GDP is mainly a consequence of the low household income share.
1/6
Good Steven Barnett piece. He points out that "targeting growth rates inconsistent with productivity trends leads to distortive policies", and argues instead for a "dramatic, permanent payroll tax cut" to boost consumption.
www.ft.com/content/d078...
Caixin: "570,600 Chinese students went abroad in 2025. The figure represents a decline of nearly 20% from the historical peak of 703,500 in 2019, bringing the scale of outbound students back to around 2016 levels."
www.caixinglobal.com/2026-04-20/c...
4/4
On October 27: "Prime Minister Nakasone has generated little support for reorienting economic policy in spite of his ringing endorsement six months ago of the Maekawa Commission's proposals for reducing the Japanese economy's dependence on exports."
www.cia.gov/readingroom/...
3/4
On October 20: "The impact on Japan's international competitiveness will depend in large part on whether the reduced hours are accompanied by the same or lower earnings. If wages are cut back along with hours, Japanese workers might not increase their spending."
www.cia.gov/readingroom/...
2/4
From the summary of the April 9 memo: "Despite the nod this week's report gives to structural adjustment, Tokyo would probably resist major adjustments in savings, consumption, and investment incentives that did not also serve its industrial policy goals."
www.cia.gov/readingroom/...
1/4
Several people have asked for more information about the Maekawa Commission report and its reception. I am attaching three memoranda on the topic written by the CIA in 1986. I find these especially helpful in illustrating perceptions at the time.
People's Daily: "China's industrial growth in the first quarter showed a clear shift toward new growth drivers, with high-tech sectors (who account for less than 20% of total industrial output) accounting for 32.6% of total growth and 51.8% of total profits.
en.people.cn/n3/2026/0417...
China's services sector comprises 58% of the country's GDP, up from 50% in 2015. It accounts for 50% of total employment.
For comparison purposes, the GDP share of the services sector is 70-80% in high-income economies and 50-65% in middle-income countries.
www.chinadaily.com.cn/a/202604/17/...
I have often mentioned Japan's 1986 Maekawa Commission Report as a way of understanding why Japan's (and by extension, China's) rebalancing was never going to be easy. I asked ChatGPT to summarize its impact and published the results on my substack.
michaelpettis858496.substack.com/p/the-maekaw...
2/2
For those who say that they aren't opposed to immigration per se, but just to illegal immigrants, this seems like a pretty good way to reduce the number of illegal immigrants. I know this is controversial, but it has to be smarter to have them inside the system than outside.
1/2
BBC: "In a letter to Spaniards posted on social media, Sánchez said the mass legalisation sought "to acknowledge the reality of nearly half a million people who already form part of our everyday lives"."
bbc.com/news/article...
Canadians as consumers may dream of cheaper EV imports, but Canadians as workers and producers won't, and contrary to what many believe, it isn't cheaper imports that raise living standards. It is more domestic production.
sc.mp/zs6o1?utm_so...
Yicai: Fierce competition among the 12 major listed Chinese automakers kept carmakers’ per-vehicle profits extremely slim, with three still losing money on each one sold. The highest profit per vehicle last year was at Seres, at RMB 9,936 ($1,454).
www.yicaiglobal.com/news/stiff-c...
3/3
This may seem counterintuitive at first, but only to those who don't think systemically. In fact my mentor at Columbia, Michael Adler, used to threaten to fail anyone in his international finance class who even mentioned bilateral trade imbalances. He was only half joking.
2/3
Canada and Mexico are both trade deficit economies. They are effectively on the same side of the global imbalances as the US, which means that their impact on the US trade deficit is to reduce it, not increase it, by absorbing part of the imbalances created by the surplus economies.
1/3
Putting tariffs on Canada and Mexico makes no sense at all, even though they run trade surpluses with the US.
That's because in a hyper-globalized world, trade imbalances are always resolved systemically, never bilaterally.
www.ft.com/content/22f2...
People's Daily: "Although high-tech manufacturing accounts for less than 20% of total industrial output, it contributed 32.6% to overall industrial growth. Data for January and February showed that it accounted for 51.8% of total industrial profits."
en.people.cn/n3/2026/0417...
CER: "There is obviously to some extent a relationship between China's GDP growth number and the real economy. Although we don’t know exactly how closely those two things match."
chinaeconomicreview.substack.com/p/numbers-nu...
I suspect that by mid-year they will have shifted more to manufacturing investment
3/3
That left Beijing with only one way to boost GDP growth – infrastructure spending.
That's why I've argued since late last year that we'd see a surge in infrastructure investment in the first half of 2026, driven not by the needs of the economy but by the need to achieve the GDP growth target.