Профиль

One of the best shows I've seen in years, and a great indication of the direction in which Beijing musicians may be moving.

Tibet represents just under 0.2% of Chinese GDP. It really doesn't tell us anything about the Chinese economy other than that the smallest provinces are statistically most likely to be outliers.

The important point is that the richer provinces seemed to grow faster on average than the poorer provinces.

4/4 This requires that much of the politically-determined expansion in total capacity must be driven by businesses that don't operate under hard-budget constraints. As a result, manufacturing capacity shifts from the former to the latter.

3/4 In an environment of massive (and growing) excess capacity and pricing involution, businesses that operate under hard-budget constraints, and so need to preserve profits, must scale back operations.

2/4 This, much more than ideology, is what has been driving the relative retreat of the private sector and the expansion of the public sector over the past two decades in China's economy.

1/4 SCMP: "Nearly 70% of the surveyed entrepreneurs said traditional manufacturing and service-sector firms were caught in a dilemma: companies had to engage in price wars to maintain revenue growth, but had to scale back operations if they wanted to preserve profits." www.scmp.com/economy/chin...

Caixin: "China’s top leadership is expected to hold off on major new stimulus at a key Politburo meeting in late July, focusing instead on executing existing fiscal policies to stabilize a slowing economy." www.caixinglobal.com/2026-07-28/a...

Caixin: "In the high-stakes game of global energy, China has been playing the crucial role of shock absorber. Market observers expect Chinese demand to remain subdued until crude prices stabilize further, choosing instead to replenish during price drops." www.caixinglobal.com/2026-07-24/a...

Yicai: "Among the top 10 provinces by GDP, Jiangsu, Shandong, Zhejiang, Sichuan, Henan, Hubei, Shanghai, and Anhui had growth faster than the national average." www.yicaiglobal.com/news/15-prov...

SCMP: "Chinese provinces have now released their growth data for the first half of the year, and the figures show a clear bifurcation between thriving tech hubs and the rest of the country." www.scmp.com/economy/chin...

For friends in Beijing, Tuesday night will feature two of the most interesting young bands to come out of the Sally Can't Dance scene.

At the aggregate level global wages have risen more slowly than global productivity since the late 1970s. It has been the surge in household and government debt that has bridged the gap.

7/7 The only sustainable solution is for wage growth to accelerate by enough to reverse the many decades during which it fell behind productivity growth. But, as I explain below, our current global trade regime makes it hard for wage growth to accelerate. x.com/michaelxpett...

6/7 businesses must cut back on production, which in turn means more unemployment and even more downward pressure on demand. This is the same problem the US faced in the 1930s, and it is the what Marriner Eccles refers to in his 1933 testimony to Congress. x.com/michaelxpett...

5/7 Many economists argue that the way to restore balance is through fiscal austerity, but this makes little sense. If fiscal spending is reduced, either household debt must rise by enough to compensate, which is worse, or else demand will fail to keep pace with supply, and...

4/7 The only way to bridge this gap, at least temporarily, is with rising household and fiscal debt, and so it should come as no surprise that once wage growth and productivity growth split apart, sometime in the late 1970s, fiscal and household debt has surged.

3/7 If it doesn't, inventory will pile up as production exceeds demand, and producers will eventually cut back, and so lay off workers. Unemployed workers, of course, will further reduce their consumption, thus exacerbating the demand problem.

2/7 productivity growth, with the latter having pulled ahead." Even more so in China. The problem is that in advanced and developing economies in which investment isn't constrained by scarce saving, consumption must rise in line with productivity to justify higher production.

1/7 FT: "According to economic theory, productivity and real wages should grow in tandem, with the benefits of new technology being shared with the workers who produce the stuff. But in the US, Europe and Japan, pay growth has decoupled from... www.ft.com/content/9741...