China's medium-term growth outlook (next year or two) will be around 4-4.5% rather than 5% (the stated target), but only because China has the debt capacity and willingness to fund non-productive investment to hit whatever target it sets; once debt capacity is exhausted, growth will face a hard constraint; the lower the growth target, the better for China's long-term health, as it slows debt accumulation.

forecastpending

Speaker

Michael Pettis

Evidence Quote

I'm starting to think that it may be 4.5%...as long as they have debt capacity...they can achieve any target they want...the lower the target, the better for China over the long term

Source

Michael Pettis: China’s Consumption Crisis Is The World’s CrisisThe Monetary Matters Network
Created: 8/11/2026, 7:43:21 AM

My Notes

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