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# ![@michaelxpettis Avatar](https://lunarcrush.com/gi/w:26/cr:twitter::917683048782503937.png) @michaelxpettis Michael Pettis

China is facing economic challenges, including deflationary pressures and stagnant domestic demand. Beijing is trying to boost growth through measures such as increasing investment and releasing new growth stabilization measures for XX major industries. However, the country remains vulnerable to a trade contraction, particularly if the US-China trade tensions escalate.

### Engagements: XXXXXX [#](/creator/twitter::917683048782503937/interactions)
![Engagements Line Chart](https://lunarcrush.com/gi/w:600/cr:twitter::917683048782503937/c:line/m:interactions.svg)

- X Week XXXXXXX +252%
- X Month XXXXXXXXX -XX%
- X Months XXXXXXXXXX -XX%
- X Year XXXXXXXXXX -XX%

### Mentions: XX [#](/creator/twitter::917683048782503937/posts_active)
![Mentions Line Chart](https://lunarcrush.com/gi/w:600/cr:twitter::917683048782503937/c:line/m:posts_active.svg)

- X Week XX +34%
- X Month XXX -XX%
- X Months XXX -XX%
- X Year XXXXX -XX%

### Followers: XXXXXXX [#](/creator/twitter::917683048782503937/followers)
![Followers Line Chart](https://lunarcrush.com/gi/w:600/cr:twitter::917683048782503937/c:line/m:followers.svg)

- X Week XXXXXXX +0.25%
- X Month XXXXXXX +0.61%
- X Months XXXXXXX +3.50%
- X Year XXXXXXX +12%

### CreatorRank: XXXXXXX [#](/creator/twitter::917683048782503937/influencer_rank)
![CreatorRank Line Chart](https://lunarcrush.com/gi/w:600/cr:twitter::917683048782503937/c:line/m:influencer_rank.svg)

### Social Influence [#](/creator/twitter::917683048782503937/influence)
---

**Social category influence**
[finance](/list/finance)  XXX% [countries](/list/countries)  XXXX% [travel destinations](/list/travel-destinations)  XXXX% [agencies](/list/agencies)  XXXX%

**Social topic influence**
[china](/topic/china) #1347, [beijing](/topic/beijing) #185, [gdp growth](/topic/gdp-growth) #13, [debt](/topic/debt) #247, [gdp](/topic/gdp) #24, [deflation](/topic/deflation) #49, [investment](/topic/investment) 0.72%, [rates](/topic/rates) #178, [surge](/topic/surge) #129, [has been](/topic/has-been) #1726

**Top accounts mentioned or mentioned by**
[@joequant](/creator/undefined) [@kapshow](/creator/undefined) [@ft](/creator/undefined) [@doggydog1208](/creator/undefined) [@bluebearmonkey](/creator/undefined) [@jtreble_deriv](/creator/undefined) [@lajohnstondr](/creator/undefined) [@qinwarrior86](/creator/undefined) [@rianauthor](/creator/undefined) [@tlanderso](/creator/undefined) [@tmax201220121](/creator/undefined) [@jonnya43417802](/creator/undefined) [@scmpnews](/creator/undefined) [@max_aragorn](/creator/undefined) [@euunul](/creator/undefined) [@crowcasey182573](/creator/undefined) [@jjanegle](/creator/undefined) [@nomorerentiers](/creator/undefined) [@aghp77](/creator/undefined) [@dogplayingpiano](/creator/undefined)
### Top Social Posts [#](/creator/twitter::917683048782503937/posts)
---
Top posts by engagements in the last XX hours

"1/2 Interesting article by Lian Ping director of the China Chief Economist Forum who argues that "China continues to face risks and perils on multiple fronts all of which threaten to undermine its economic growth prospects.""  
[X Link](https://x.com/michaelxpettis/status/1978026097619939358) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T09:12Z 180.5K followers, 106.2K engagements


"Interesting Caixin story on the evolution of a bankruptcy process: "For Beijing this is about more than paperwork. As debt piles up and growth slows China needs a functioning exit valve one that can unwind failed firms without triggering social unrest or financial contagion.""  
[X Link](https://x.com/michaelxpettis/status/1977950846832050600) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T04:13Z 180.5K followers, 25.9K engagements


"For those who want to know more about rare earths Ed Conway is always very helpful in discussing the materials we don't often think about but which are vital for modern life. As part of his report he notes that the US dominates the production of ultra-high-purity quartz (vital for the production of silicon chips) even more than China dominates the production of rare earths setting up what may be a potential stand-off"  
[X Link](https://x.com/michaelxpettis/status/1978033993003188637) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T09:43Z 180.5K followers, 77.4K engagements


"4/9 So which is better to have excess supply or to have excess demand The historical precedents are pretty clear: in a global trade conflict the persistent surplus countries have always been more vulnerable to a contraction in trade than the persistent deficit countries"  
[X Link](https://x.com/michaelxpettis/status/1978380866926551290) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T08:42Z 180.5K followers, 19.8K engagements


"8/9 All this suggests that the key to how the latest events are resolved depends on whether Washington believes that it is in a stronger position to weather a 1-2 year trade conflict than Beijing thinks it is especially if it is successful in reducing its trade deficit"  
[X Link](https://x.com/michaelxpettis/status/1978380876812607524) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T08:42Z 180.5K followers, 21K engagements


"3/7 It is worth noting that on a year-on-year basis consumer goods were down XXX% in September consumer services were up XXX% and core inflation was up 1.0%. Much of the deflation in other words was concentrated in tradable goods which shouldn't be much of a surprise"  
[X Link](https://x.com/michaelxpettis/status/1978320339953225770) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T04:41Z 180.5K followers, 1148 engagements


"4/7 So is deflation behind us It depends on how China balances the fight against involution. Remember that involution was a consequence of Beijing's response to the sharp drop in property investment after 2021-22. Because it couldn't let overall investment growth decline if it"  
[X Link](https://x.com/michaelxpettis/status/1978320342264508528) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T04:41Z 180.5K followers, 1154 engagements


"1/3 Very interesting essay by Graeme Thompson that places the intellectual underpinnings of the current global trade regime in an historical perspective. By the end of the 19th Century Thompson writes "the long-standing hegemony of. @ga_thomps"  
[X Link](https://x.com/michaelxpettis/status/1973695153698443283) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-02T10:22Z 180.5K followers, 21.3K engagements


"@pdsegal I think the Volcker shock accelerated what would have been an external debt problem anyway. By the mid-1970s external debt was rising much faster than both GDP and exports and the first peso crisis occurred in 1976"  
[X Link](https://x.com/michaelxpettis/status/1975009336872390968) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-06T01:24Z 180.5K followers, XXX engagements


"@pdsegal Id add that the surge in interest rates was also like currency appreciation a kind of ISI reversal"  
[X Link](https://x.com/michaelxpettis/status/1975010016378995045) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-06T01:27Z 180.5K followers, XXX engagements


"I havent posted much this week because Ive been in NY and DC meeting with a number of people to discuss China and trade. Not surprisingly there was a lot of interest especially this week"  
[X Link](https://x.com/michaelxpettis/status/1976640608535298491) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-10T13:26Z 180.5K followers, 81.7K engagements


"2/7 PPI was also flat month on month for the second month in a row. Prices were still down year on year with CPI at -XXX% and PPI at -XXX% but with the fight against involution some of the worst price cutting seems to be behind us"  
[X Link](https://x.com/michaelxpettis/status/1978320337743036422) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T04:41Z 180.5K followers, 1491 engagements


"5/7 was to meet the GDP target Beijing engineered a sharp expansion in manufacturing capacity in a world already suffering from excess. This led to explosive growth in capacity in the preferred industries into which much of the additional investment flowed"  
[X Link](https://x.com/michaelxpettis/status/1978320344143589633) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T04:41Z 180.5K followers, 1356 engagements


"McNair argues that because of low transportation costs soybean prices in any country that produces soybeans are likely to be a function of global supply and global demand and not a function of changes in purchases by any particular country. That seems reasonable to me although I know nothing about technical details in the soybean market that might make this claim wrong. It would be easy to see if there is a difference between the global price of Brazilian and Argentine versus American soybeans"  
[X Link](https://x.com/michaelxpettis/status/1975625180920652186) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-07T18:12Z 180.5K followers, 37K engagements


"2/8 This is also the impression I got from my meetings last week. There is a sense that Beijing overplayed its hand perhaps because until China is able to boost domestic demand (something that will be extremely difficult) it is still very vulnerable to a trade contraction"  
[X Link](https://x.com/michaelxpettis/status/1978117595849998387) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T15:16Z 180.5K followers, 2685 engagements


"1/4 Yicai: "China has released new growth stabilization measures for XX major industries: steel nonferrous metals petrochemical chemicals building material machinery automobile electrical equipment light industry and electronic information.""  
[X Link](https://x.com/michaelxpettis/status/1977537288029737205) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-13T00:50Z 180.5K followers, 43K engagements


"1/9 WSJ: "According to the people close to Beijings decision-making process Xis hard-line strategy is based on the belief that Trump will ultimately fold and offer concessions rather than deploy Washingtons own significant leverage." via @WSJ"  
[X Link](https://x.com/michaelxpettis/status/1978380859280441567) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T08:42Z 180.5K followers, 307.9K engagements


"6/9 With investment levels already so high the only way China can get debt under control is to reduce investment growth but if it wants to maintain current growth rates it cannot do this without generating a surge in consumption growth something it has found very difficult to pull off"  
[X Link](https://x.com/michaelxpettis/status/1978380871360184437) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T08:42Z 180.5K followers, 16.4K engagements


"1/2 Caixin: "Chinas exports of new-energy vehicles surged XXXX% year-on-year to XXXX million units in the first nine months of 2025. The export frenzy underscores a broader challenge: stiff domestic competition and significant overcapacity.""  
[X Link](https://x.com/michaelxpettis/status/1978684111846850882) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-16T04:47Z 180.5K followers, 21.2K engagements


"Interesting Caixin article on the cleaning up of local-government arrearages: "Beijing is amping up support to assist in clearing local public-sector arrears owed to businesses but how keen localities will be to take on new interest-bearing debts to settle interest-free ones has become a cause for concern.""  
[X Link](https://x.com/michaelxpettis/status/1979036291280109749) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-17T04:06Z 180.5K followers, 18.6K engagements


"1/6 Yicai: "Agricultural Bank of China has absorbed XXX rural bank branches in northeastern Jilin province over the past month which banking industry experts see as an emerging approach for resolving credit market risks.""  
[X Link](https://x.com/michaelxpettis/status/1979763094105759847) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-19T04:14Z 180.5K followers, 11.6K engagements


"3/6 This has been going on for several years and was confirmed last year when all of the funding that had been designated to recapitalize a struggling banking system was directed to the big Beijing banks suggesting that insolvency would be resolved by consolidation"  
[X Link](https://x.com/michaelxpettis/status/1979763099659022577) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-19T04:14Z 180.5K followers, XXX engagements


"Brendan Greeley explains that the eagerness of the world to buy US assets creates a kind of "Dutch disease" for US manufacturers and the US economy. @bhgreeley via @ft"  
[X Link](https://x.com/michaelxpettis/status/1943905871597384023) [@michaelxpettis](/creator/x/michaelxpettis) 2025-07-12T05:30Z 180.5K followers, 99.7K engagements


"Caixin: "The industry is looking to shift to a buyer-funded model under which investors rather than issuers would pay. This comes as investors are railing against flattering reports and inflated credit ratings.""  
[X Link](https://x.com/michaelxpettis/status/1973975994152415241) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-03T04:58Z 180.5K followers, 13.9K engagements


"@Euunul That's silly. Austerity is good for creditors and bad for workers and businesses. Just because it was bad for developing economies doesn't mean it should be good for developed economies"  
[X Link](https://x.com/michaelxpettis/status/1973983249061064944) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-03T05:27Z 180.5K followers, XXX engagements


"1/6 Good news for the Chinese stock markets. According to Yicai "Chinas new household deposits contracted in July and August from the year before while deposits from non-bank financial institutions surged in a sign that people have been moving"  
[X Link](https://x.com/michaelxpettis/status/1967809754518130698) [@michaelxpettis](/creator/x/michaelxpettis) 2025-09-16T04:36Z 180.5K followers, 15.7K engagements


"4/6 It represented a reversal of a twenty year process beginning in the late 1990s to decentralize credit allocation away from the big Beijing banks. Because the explosive growth of local banks at the time coincided with enormous pressure on local governments to fund"  
[X Link](https://x.com/michaelxpettis/status/1979763102498611232) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-19T04:14Z 180.5K followers, 1011 engagements


"5/6 excessively high GDP growth targets the result was growing insolvency among the smaller banks along with several bank runs. Rather than close the banks pay off small depositors and write down the losses the regulators have mostly chosen to fold them into the big banks"  
[X Link](https://x.com/michaelxpettis/status/1979763105279381995) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-19T04:14Z 180.5K followers, 7758 engagements


"1/2 Yicai: " China's NDRC together with the Ministry of Finance has released the fourth and final tranche of this year's special treasury bonds earmarked for consumer-goods trade-ins.""  
[X Link](https://x.com/michaelxpettis/status/1973265043539239251) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-01T05:53Z 180.5K followers, 10.9K engagements


"1/4 Yicai: "China is expected to achieve GDP growth of XXX percent in 2025 and XXX percent in 2026 up from the previously forecasted XXX percent for both years in April according to the World Bank.""  
[X Link](https://x.com/michaelxpettis/status/1977953680193425678) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T04:24Z 180.5K followers, 15K engagements


"5/8 Because many analysts seem to think that what matters in the trade dispute is the bilateral Chinese surplus with the US rather than the overall US trade deficit they speak of China's growing surpluses with the rest of the world as an indication of export "resilience""  
[X Link](https://x.com/michaelxpettis/status/1978117602682576902) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T15:16Z 180.6K followers, 2595 engagements


"1/7 In a sign perhaps that the fight against involution has been successful CPI prices in China were stable for the third month in a row up XXX% month on month in September. This is still well below the X% target but it is better than more deflation"  
[X Link](https://x.com/michaelxpettis/status/1978320335872393641) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T04:41Z 180.5K followers, 13.2K engagements


"6/7 By now cutting back on investment in involuted industries Beijing must decide where else to increase investment in order to achieve the GDP growth target. To the extent that it is in infrastructure. this should boost domestic demand and keep deflation at bay for a few years"  
[X Link](https://x.com/michaelxpettis/status/1978320346446287023) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T04:41Z 180.5K followers, 8158 engagements


"Yicai: "In the nine months ended Aug. XX trade rose X% to CNY33.61 trillion. Exports gained XXX% to CNY19.95 trillion while imports dipped XXX% to CNY13.66 trillion. Measured in US dollars exports were up XXX% at USD2.8 trillion and imports down XXX% at USD1.9 trillion.""  
[X Link](https://x.com/michaelxpettis/status/1978321950427722007) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T04:48Z 180.6K followers, 13K engagements


"5/9 One very obvious example of course is the very different impacts the global trade contraction during the 1930s had on the US the world's leading trade surplus nation at the time and the UK one of the world's leading trade deficit nations"  
[X Link](https://x.com/michaelxpettis/status/1978380869116022897) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T08:42Z 180.5K followers, 16.5K engagements


"7/9 That is why I suspect that an escalation of global trade conflict is likely to be more difficult for China in the medium term even if its ability to control the financial system and ignore short-term pain puts it in a stronger position in any short-term conflict"  
[X Link](https://x.com/michaelxpettis/status/1978380873767538875) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T08:42Z 180.5K followers, 18.8K engagements


"2/6 ABC has absorbed most of the problem branches of five different Jilin lenders as part of a larger program to resolve insolvent smaller rural and local banks mainly by merging them into the large state-owned banks"  
[X Link](https://x.com/michaelxpettis/status/1979763097025101899) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-19T04:14Z 180.5K followers, 1020 engagements


"1/4 Caixin: "China is to inject capital into the six large state-owned commercial banks via special bonds as part of a package of stimulus policies. Sources estimate that the scale of the capital injection will total approximately X trillion yuan.""  
[X Link](https://x.com/michaelxpettis/status/1848927656491794738) [@michaelxpettis](/creator/x/michaelxpettis) 2024-10-23T03:21Z 180.6K followers, 103.6K engagements


"1/2 Yesterday Bank of China Bank of Communications China Construction Bank and Postal Savings Bank of China announced that they would issue new shares worth RMB XXX billion with the Ministry of Finance buying RMB XXX billion"  
[X Link](https://x.com/michaelxpettis/status/1906914838368174306) [@michaelxpettis](/creator/x/michaelxpettis) 2025-04-01T03:41Z 180.6K followers, 85.1K engagements


"Despite a raft of stimulus measures according to Caixin "During the National Day holiday from Oct. X to X new home subscriptions in XX key cities tumbled XX% from a year earlier and XX% from September" after posting their first monthly and annual sales gains this year in September"  
[X Link](https://x.com/michaelxpettis/status/1977537794873626913) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-13T00:52Z 180.5K followers, 45.8K engagements


"2/4 Back in May I wrote that while most analysts were forecasting Chinese GDP growth rates for 2025 well below the X% GDP growth target by the end of the year all the forecasts would converge to 5%"  
[X Link](https://x.com/michaelxpettis/status/1977953681992769673) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T04:24Z 180.6K followers, 1322 engagements


"1/8 WSJ: "President Trump is trying to publicly de-escalate tensions with China to soothe markets while privately keeping up pressure on Beijinga difficult balancing act that is being closely watched by Wall Street." via @WSJ"  
[X Link](https://x.com/michaelxpettis/status/1978117593111134560) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T15:16Z 180.5K followers, 21.5K engagements


"3/8 Although it is the growing US trade deficit that accommodates the growing Chinese surplus I suspect many in Beijing think that it is the bilateral surplus with the US that matters which is why it believed it needed to "win" the trade discussions as quickly as possible"  
[X Link](https://x.com/michaelxpettis/status/1978117598114935035) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T15:16Z 180.5K followers, 2356 engagements


"4/8 To the extent that Washington understands this my guess is that it can afford to be accommodative on bilateral discussions but will increasingly focus on cutting the overall trade deficit. This will inevitably mean a change in the current trade policies"  
[X Link](https://x.com/michaelxpettis/status/1978117600409169974) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-14T15:16Z 180.5K followers, 2368 engagements


"7/7 To the extent that it is in other manufacturing sectors this will mostly shift price-cutting from the involuted manufacturing sectors to the non-involuted sectors in which case we are likely to see deflationary pressures revive perhaps next year"  
[X Link](https://x.com/michaelxpettis/status/1978320349264515567) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T04:41Z 180.5K followers, 12K engagements


"3/9 But if you were to rewrite the sentence as: "With hiring slowing domestic demand stagnant and prices declining many economists say China isnt positioned to absorb another major trade fight with US" it would no less true"  
[X Link](https://x.com/michaelxpettis/status/1978380864695275746) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T08:42Z 180.5K followers, 30K engagements


"9/9 My understanding is that at least some top officials in Washington believe the US is indeed in a stronger position although ultimately what matters is if Trump believes it. I guess we will soon see how much the stock market drives Trump's policy decisions"  
[X Link](https://x.com/michaelxpettis/status/1978380879161352431) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-15T08:42Z 180.5K followers, 21.5K engagements


"1/5 Chinese debt continues to rise quickly with total social financing rising by XXX% year on year in September (more than twice GDP growth) to RMB XXXXXX trillion. This is equal to nearly XXX% of 2025's expected GDP (versus XXX% at the end of 2024)"  
[X Link](https://x.com/michaelxpettis/status/1978697209609666868) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-16T05:39Z 180.5K followers, 140.5K engagements


"7/9 This will mean as if has meant for every other country that has tried to rebalance domestic demand in the same way much slower growth as it rebalances. This isn't a bad thing. It is precisely what China needs for its growth to become sustainable"  
[X Link](https://x.com/michaelxpettis/status/1979419472848159032) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-18T05:29Z 180.5K followers, 1717 engagements


"8/9 But it will also mean that China must either give up or significantly lower its GDP growth targets. Beijing cannot expect that if a change in tax incentives genuinely changes the focus from boosting production to boosting consumption this won't affect growth"  
[X Link](https://x.com/michaelxpettis/status/1979419551977869652) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-18T05:29Z 180.5K followers, 8256 engagements


"Caixin: "Chinas panda bond market onshore debt issued by foreign entities in yuan is experiencing a historic surge fueled by a mix of low interest rates and regulatory reforms that now allow foreign issuers to use the proceeds globally.""  
[X Link](https://x.com/michaelxpettis/status/1979422480591941689) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-18T05:41Z 180.5K followers, 19.7K engagements


"1/9 Bloomberg's Chris Anstey notes that "the consumer not the producer has been the main focus of officials in Washington. By contrast Chinas leadership drawing on Marxist tradition of course focused on production." @AnsteyEco"  
[X Link](https://x.com/michaelxpettis/status/1979780467487597048) [@michaelxpettis](/creator/x/michaelxpettis) 2025-10-19T05:23Z 180.5K followers, 10K engagements