If We Don’t Understand Both Sides Of China's Balance Sheet, We Understand Neither

If We Don’t Understand Both Sides Of China’s Balance Sheet, We Understand Neither by Michael Pettis, Michael Pettis’ China Financial Markets

With so much happening in China in the past month it seems that there are a number of very specific topics that any essay on China should focus. I worry, however, that we get so caught up staring at strange clumps of trees that we risk losing sight of the forest. What happened in July this year, and again in August, or in June 2013, or a number of other times, was not an unexpected shock and game changer. China is a dynamic and unbalanced economic system entering into something that we might grandly call a “phase...