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 PettisEvidence 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 Crisis— The Monetary Matters NetworkCreated: 8/11/2026, 7:43:21 AM
My Notes
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