Michael Pettis's Blog

Senior Associate

Michael Pettis is a Senior Associate at the Carnegie Endowment for International Peace and a finance professor at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets. He has taught, from 2002 to 2004, at Tsinghua University’s School of Economics and Management and, from 1992 to 2001, at Columbia University’s Graduate School of Business. He is also Chief Strategist at Shenyin Wanguo Securities (HK).

Pettis has worked on Wall Street in trading, capital markets, and corporate finance since 1987, when he joined the Sovereign Debt trading team at Manufacturers Hanover (now JP Morgan). Most recently, from 1996 to 2001, Pettis worked at Bear Stearns, where he was Managing Director-Principal heading the Latin American Capital Markets and the Liability Management groups. He has also worked as a partner in a merchant banking boutique that specialized in securitizing Latin American assets and at Credit Suisse First Boston, where he headed the emerging markets trading team. Besides trading and capital markets, Pettis has been involved in sovereign advisory work, including for the Mexican government on the privatization of its banking system, the Republic of Macedonia on the restructuring of its international bank debt, and the South Korean Ministry of Finance on the restructuring of the country’s commercial bank debt.

Pettis is a member of the Institute of Latin American Studies Advisory Board at Columbia University as well as the Dean’s Advisory Board at the School of Public and International Affairs. He received an MBA in Finance in 1984 and an MIA in Development Economics in 1981, both from Columbia University.

The GDP of Bridges to Nowhere

By Michael Pettis – I was recently part of a discussion on a listserv that brings together Chinese and foreign experts to exchange views on China-related topics. What set off this discussion was a claim that the Chinese economy...

What Would Happen If China Stopped Buying U.S. Treasury Bonds?

By Michael Pettis – If China is indeed threatening to retaliate against any U.S. trade action by reducing its purchases of U.S. government bonds, not only would this be a pretty hollow threat, but in fact it would be exactly what Washington wants. To see why...

China Update - Why Is the Consensus Now So Optimistic?

As long as China has debt capacity, it can achieve any GDP growth rate Beijing requires, simply by allowing credit to expand. But debt levels are already high, and credit must expand at an accelerating pace to maintain growth. China is probably still a few years away...

Mexico’s Positive Impact on the US Trade Balance

Contrary to what one might first expect, Mexico’s role in global trade is actually beneficial to the United States. While restricting Mexican imports will reduce the American deficit with Mexico, it will increase the overall American deficit.

Is Peter Navarro Wrong on Trade?

Whether the US current account deficit is harmful or not to the US economy depends on the assumptions we make about capital scarcity. In a world awash with excess capital and insufficient demand, the US current account...

Three Possible Scenarios for China

In an article in Wednesday’s Financial Times, Gabriel Wildau, Yuan Yang, and Tom Mitchell set out a range of economic outcomes for China. They propose three scenarios that they think—and I agree—are the most plausible ones.

A US Retreat on Global Trade Will Not Lead to a Shift in Power

The very first on the list of executive actions that his administration would implement from “day one,” according to US President-elect Donald Trump in his November 21, 2016, video clip, involved a US retreat on trade...

The Titillating and Terrifying Collapse of the Dollar...Again

Foreign perceptions about the Chinese economy are far more volatile than the economy itself, and are spread across a fantastic array of forecasts. On one extreme there are still many who hold the view that overwhelmingly dominated...

Will China’s New “Supply-Side” Reforms Help China?

It wasn’t enough that we started 2016 with one of the worst weeks in the recent history of Chinese and global markets, but the panic continued into the following weeks and wreaked a great deal of damage to confidence. A lot of the reflexive...

Why “Thin Air Money” Isn’t Created Out of Thin Air

A recurring conversation I have with clients concerns the ability of banks to create credit, and of governments to monetize debt, and whether this ability is the solution to or the cause of financial instability and economic crisis.

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