In Restructuring the Chinese Economy, Michael Pettis outlines six paths that China can follow—the only logical paths that lead ultimately to. Avoiding the Fall: China’s Economic Restructuring. MICHAEL PETTIS. Copyright Date: Published by: Carnegie Endowment for International Peace. Avoiding the Fall has 98 ratings and 6 reviews. The days of rapid economic growth in China are over. Mounting debt and rising internal distortions mean t.

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Joe Coffey rated it it was amazing Dec 30, A few years ago, it would have been hard to believe that China could see economic stagnation, but now it is obvious. Jonathan Tepper rated it really liked it Oct 13, If China’s comparative advantage were cheap labor, we would expect its growth to be heavily labor-intensive as businesses laded up on the most efficient falp.

My library Help Advanced Book Search. Nazri Awang rated it liked it Apr 18, The book is definitely worth reading for anyone interested in looking at why China may well crash in the next few years.

Over the long term, Chinese growth will be much healthier and the risk of a Chinese debt crisis much reduced, but over the short term, unless there is an unlikely surge ppettis global demand, China cannot both rebalance its economy and improve its trade performance. Sub three percent growth is a certainty.

Chen rated it really liked it Dec 28, Vineet Tandon rated it liked it Mar 22, Pettis draws apt parallels between China, and Brazil of 70s, US of the 20s and 30s, Japan of the 90s; and very logically goes on to show the need for China to rebalance, followed by how it could potentially do so.


The question for China is when will growth slow down? Peter rated it really liked it Oct 13, But overall it is an interesting, provocative and timely take on China’s economy.

But China’s growth is actually heavily capital-intensive. Fresh insight, especially about accounting wise. Ask most people what China’s comparative advantage is, and they are likely to say that it is the huge pool of cheap and thee labor.

Open Preview See a Problem? Just a moment while we sign you in to your Goodreads account. Zack Sanders rated it really liked it Nov 22, In exchange, however, China’s domestic market will become a bigger source of demand as Chinese households benefit from rebalancing.

To ask other readers questions about Avoiding the Fallplease sign up. The downside is that avkiding this the most benign forms of rebalancing are politically threatening and thus, in Michael Pettis’s view, unlikely to occur. Beijing has no choice but to take significant steps to restructure its economy.

It may be true that labor is cheap in China, but capital is cheaper, and can even be free or have a negative cost as a result of a negative interest rate. But it could be more compacted.

Want to Read saving…. Return to Book Page. Apr 29, Tirath rated it it was amazing.

Avoiding the Fall: China’s Economic Restructuring

Preview — Avoiding the Fall by Michael Pettis. Just as a revaluation of the renminbi implies a transfer of wealth from the People’s Bank of China to Chinese households, and so is likely to increase consumption, other transfers from the state sector to households can mmichael the same effect.

Mounting debt and rising internal distortions mean that rebalancing is inevitable. Books by Michael Pettis. Some important routes include increasing interest rates to force up foreign exchange values of the currency, transferring wealth from the state to the private sector by absorbing private-sector debt, micyael privatizing assets to increase household sector wealth.


As a result, although China continued to post spectacular GDP growth numbers, this growth came with a cost – unsustainable imbalances and even faster This book is not yet featured on Hte. China’s Economic Restructuring by Michael Pettis. It is increasingly accepted that China’s growth model, which served it very well in the s and 90s, reached its useful limit during the past decade.

This puts him numerically below many of the other China bears fqll if his qualitative arguments are similar. China was able to raise debt quickly and spawn investment that permitted it to circumvent the complications of its development model.

Avoiding the Fall: China’s Economic Restructuring by Michael Pettis

Investment is important to the extent that the capital invested engineers growth, but it is not reasonable to fzll that every single dollar thr China spends on infrastructure or some arbitrary project will do so. Quotes from Avoiding the Fall The very cheap capital especially means that a very significant portion of the cost — as much as 20 to 40 percent of the total amount of the loan — is forced onto depositors just in the form of low interest rates.

In light of these issues, Pettis brilliantly lays out the routes China can take while bearing in mind their limitations. Lists with This Book. The book is somewhat reminiscent of avoidng arguments of Steve Keen, the Australian economist who believed that there was massive debt overhang in the early s that would lead to a financial calamity.