Another month of data shows little has changed

CHINA FINANCIAL - Report 17 Jun 2025 by Michael Pettis

Special points to highlight in this report:

- China’s growth model remains structurally unbalanced, as the government continues to prioritize aggressive GDP targets without implementing the consumption-focused reforms needed for sustainable development. There was, however, some good news in May’s consumption data: an unexpected surge in May’s retail sales. We will all be watching to see if this surge will be extended into the summer, but I suspect that without a major change in fiscal policy, it will quickly revert to the very weak numbers generated during the first four months of 2025.

- Beijing’s supply-side strategy is fueling industrial overcapacity and rising trade surpluses, increasing global tensions and economic inefficiencies. Credit is flowing mainly to firms and governments rather than households, pushing debt higher while consumption remains weak—suggesting a fragile, unsustainable growth path.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2025 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.