1/9 Very interesting thread. Capital Economics says China’s GDP growth has been overstated by roughly 12% in the past five years – a very hefty number – while the San Francisco Fed accepts the numbers in aggregate but says Beijing has been smoothing out the data.

An analysis that follows the rise and fall of import substitution as a development idea finds that early proponents of import substitution were surprisingly cautious advocates of the policy, from Douglas Irwin nber.org/papers/w27919

The story of how China has been able to avoid crisis. Told by Senior Fellow at @CarnegieBeijing, Michael Pettis & 🇺🇸 Kyle Bass 🇹🇼. "Crisis is a balance sheet problem - but when you can restructure liabilities at will, crisis becomes very unlikely." 👉 rvtv.io/344F2IH

"More than $1t in foreign assets are now held by 'other depository corporations' against just $260b in foreign liabilities. The net position of China’s banks has grown by about $126 billion just since April." barrons.com/articles/behin… <--how to do fx intervention under the table

1/6 I don’t think there were any big surprises in China’s very lopsided Q3 GDP growth data. As I have long argued, China is well on its way to recording GDP growth for the year of 2-3%. GDP growth is up 4.9% for the quarter and 0.7% year to date. xinhuanet.com/english/2020-1…

China’s commitment to be carbon neutral by 2060 is a game changer. Even with slower growth, with merely maintaining the latest trend in decarbonisation, China alone could spend by the 2050s the entirety of the global CO2 budget consistent with 1.5 degrees warming 1/6

Well put by Rhodium Group: "facilitating recovery while at the same time deepening systemic risks". This is a kind of doubling down on what worked before, even though underlying conditions have changed.

China's path out of Covid-19 (Part 1) creditmarketquibs.wordpress.com/2020/10/19/chi… via WordPress.com

A growth agenda 1. We all want to go back to the way things were 2. But that way was environmentally unsustainable 3. Let's permanently WFH, fly much less, live locally 4. Issue debt to retrain those who lose jobs 5. Let's not return to status quo ex ante 6. Use debt to change...

In the new episode of Global Law and Business Podcast, I discuss my reading recommendation of the week, "China’s recovery is not what it seems” by Michael Pettis. Stream the episode today. bit.ly/33Y8D6s

Many papers have emerged analysing the March episode of price collapse and illiquidity in US treasuries, an unprecedented event in the “deepest and most liquid “ financial market in the world. Many things hinge on this analysis 1/n

Excellent thread from Constancio .. (on the Treasury market stress back in March) lots of papers I now need to read as well h/t Iñaki Aldasoro

One of basic constraints on Chinese household consumption is that there is no substantial mechanism for distributing income to lower income or precarious households. Brad Setser Michael Pettis have both emphasize this point. From Oct 2020 Paulson Institute MacroPolo report.

1/3 An appreciating RMB rebalances China's economy by effectively transferring income from manufacturers and government entities that are long FX (mainly the PBoC and banks) to households, who as net importers are effectively short foreign currency. scmp.com/economy/china-…

Important story from the FT -- China accounts for $1.9b of the (very modest) $5.3b rescheduled through the G-20's DSSI. But $1.9b is modest v the (at least) $13.4b owed to China by DSSI countries ... 1/x

6/7 economy is required to meet. China’s GDP measure, in other words, is actually a hybrid in which NMP is imposed on top of GDP. This is why I have long argued that comparing China’s GDP with that of other countries is quite meaningless, although I don’t expect most...

An early start (for me), but good fun ... Learned a lot about the history of central bank swap facilities

China is facing its most serious Covid outbreak since the start of the pandemic in early 2020, writes Katie Stallard. newstatesman.com/world/asia/chi…

Early drama: Hu Jintao seen being led out soon after reporters are led into the main hall