China has a unique third option if it could get consumption to surge dramatically: rebalance without GDP slowdown, which is theoretically possible but would require major transfers that could be 'disruptive either politically or or economically' and may require redistributing assets from SOEs to households through holding companies that give shares to households.
normativepending
Speaker
Michael PettisEvidence Quote
“it's very hard to imagine how you would do that without major transfers...One Chinese professor proposed every province creates a holding company...what you're talking about is really a complete institutional change in the local government system”
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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