Not much came out of the Two Sessions

CHINA FINANCIAL - Report 17 Mar 2025 by Michael Pettis

Special points to highlight in this report:

• So far, I expect economic activity in 2025 to look a lot like economic activity in 2024. In 2025 we can expect a reduction in the astonishingly high contribution of net exports to GDP growth in 2024, balanced by an increase in the disappointingly low contribution of consumption to GDP growth, and a shift from investment in manufacturing to investment in infrastructure, but otherwise China will only be able to achieve the 5% GDP growth target with another surge in debt.

• There is more talk than ever among policymakers about the need for China to raise the consumption share of GDP, but so far there is no reason to think this talk will be more effective than it was in 2024.

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