1/4 FT: "Europe’s hopes of a return to growth in 2026 rest largely on Germany’s €1tn debt-funded spending drive on infrastructure and defence." www.ft.com/content/4db9...

1/5 FT: "Chinese offerings of asset-backed securities have hit a record high this year as cash-strapped local governments struggle to plug fiscal holes." Needless to say, selling ABS is a double-edged sword. www.ft.com/content/2d9e...

1/7 There's a lot of recent talk about a strengthening of the RMB in 2026, and while I expect that there will be some strengthening, its impact will mostly be to reverse part of the real RMB weakening of recent years. www.wsj.com/finance/curr...

1/2 Interesting Caixin article: "As Chinese investment deepens across Latin America, companies are learning that their vaunted “China speed” — a culture of high velocity and high pressure — must contend with strict labor laws and deeply ingrained norms." www.caixinglobal.com/2025-12-27/w...

Good news for me and my Beijing friends: according to Yicai, "Beijing, Hangzhou, and Shanghai claimed the top three positions in a Tsinghua University ranking that measures Chinese cities by residents’ health." www.yicaiglobal.com/news/beijing...

1/2 Yicai: "Chinese exporters have shifted focus to the European market this year as they face pressure from US tariffs. While many have seen strong results, the move has also ramped up competition across the region. www.yicaiglobal.com/news/europe-...

Yicai: "Local governments across China are rolling out more subsidies for car purchases to spur year-end auto sales." www.yicaiglobal.com/flashdetail/...

1/2 Xinhua: "China has achieved zero growth in total water consumption since the beginning of the 14th Five-Year Plan period (2021-2025), even as the country's economic aggregate continued to reach new heights and grain output remained abundant." en.people.cn/n3/2025/1227...

I just finished reading Philip Snow's very interesting book on the complicated history of one of the world's most important geo-political relationships.

1/2 The Chief Economist at Huatai Securities believes the RMB is beginning a strengthening cycle: "Fundamentally, the yuan is highly competitive, and its relative price advantage is growing daily. Between April 2022 and June of this year, the yuan’s... www.caixinglobal.com/2025-12-26/c...

Bloomberg: "China has launched a national venture capital fund and three regional funds, together worth billions of dollars, as part of a push to foster home-grown tech champions. The national fund will run for 20 years." www.bloomberg.com/news/article...

Chinese retail have been huge buyers of gold in recent years, and this year some of the interest seems to have shifted to silver. www.bloomberg.com/news/article...

1/4 Bloomberg: "One measure of borrowing by China’s local governments for infrastructure is on pace to hit a six-year low. Behind the downturn is China’s campaign to rein in so-called hidden local debt, along with increasingly stringent rules for... www.bloomberg.com/news/article...

Yicai: "The floor area of sold homes and the investment completion were only at 48 percent and 62 percent in the first 11 months of this year, respectively, from the level in the same period in 2021, according to KPMG China." www.yicaiglobal.com/news/china-e...

Yicai: "With the number of travelers between China and Japan continuing to decrease after relations between the two countries cooled last month, nearly half of the flights between the two countries are expected to suspend operations in January." www.yicaiglobal.com/news/almost-...

“To sustain a stable and fair global system, policymakers must recognize that integration entails shared constraints.” @michaelpettis.bsky.social makes the case for a global customs union:

1/5 Caixin: "The FCC said that foreign-made drones and key components pose an “unacceptable risk” to U.S. national and public safety and should be added to the agency’s Covered List, a move that would bar new models from receiving regulatory approval." www.caixinglobal.com/2025-12-24/u...

Funny article about an "increasingly fierce" global competition in "police dog technology". www.reuters.com/world/asia-p...

Interesting short piece by Carolyn Sissoko on the institutional role of banks in a credit economy.

For my friends in Beijing, this evening we're putting on an especially good show in our weekly series, with performance by Yan Yulong, Yan Jun and Zhang Shouwang, three of the best-known experimental musicians in China.

1/11 WSJ: "The number of ride-hailing drivers in China tripled to 7.5 million in the four years to 2024, even though the number of rides grew only by about 60% during the same period, government data shows." www.wsj.com/world/asia/1...

Yicai: "Beijing has reaffirmed plans to increase the state-funded basic pension with the aim of strengthening social security and boosting consumption. The monthly pension for rural residents should be doubled to around CNY500 to CNY600 by 2035." www.yicaiglobal.com/news/china-p...

1/4 Caixin: "At the conclusion of the Central Economic Work Conference in December, the CCP unveiled a blueprint for 2026 that signals deep-seated structural problems, from industrial overcapacity to persistent deflationary pressures." www.caixinglobal.com/2025-12-19/i...

Xinhua: ""Expanding domestic demand has been identified as the top priority task for China's economic work in 2026, with a focus on promoting a better match between supply and demand."" Belated recognition that boosting supply doesn't resolve weak demand? english.news.cn/20251219/2f0...

1/2 Bloomberg: "The share of Chinese bonds with maturities beyond 10 years has climbed to around 31% of outstanding central and local government debt, the highest level in a decade and up from a low of 11.6% in 2018." www.bloomberg.com/news/article...

1/2 China Banking News: "Economists such as Brad Setser have long asserted that the renminbi is massively undervalued, leading to huge trade imbalances and China’s accumulation of a massive current account surplus. Leading economists within China have... open.substack.com/pub/chinaban...

1/2 FT: "Brazilian president Luiz Inácio Lula da Silva has threatened to walk away from a blockbuster trade deal with the EU after key countries asked Brussels to delay a vote to approve the agreement." www.ft.com/content/f147...

1/4 Interesting opinion piece in Caixin by two CCB analysts: "China’s headline credit figures appear stable, but a look beneath the surface reveals an alarming trend: the engine of organic economic growth is... www.caixinglobal.com/2025-12-17/c...

1/10 President Macron says "We must acknowledge that these imbalances are both the result of weak EU productivity and China’s policy of export-driven growth." The first part of that statement is technically not true. www.ft.com/content/c8fd...

1/5 SCMP: "Beijing’s fresh imperative to “invest in people” – reaffirmed at an agenda-setting policy meeting last week – reflects a rethink in economic strategy designed to stimulate domestic demand and improve social welfare." www.scmp.com/economy/chin...

1/2 Xinhua: "Expanding domestic demand will be the top priority of China's economic policy in 2026. Policies will be rolled out to boost consumption through both the supply and demand sides. Efforts will also be made to reverse the decline in investment." english.news.cn/20251216/314...

Europe has no choice but to intervene on its external accounts to counter trade intervention abroad, argues @michaelpettis.bsky.social here. Policymakers must distinguish between domestic conditions that hamper efficiency and those that undermine competitiveness www.ft.com/content/da6d...

Bloomberg: "Policymakers meeting last week pledged to stop the decline in investment, with Xi also calling for heightened attention to the issue. Authorities could push for more big infrastructure projects next year to stabilize growth." www.bloomberg.com/news/article...

1/2 Caixin: "Zhejin’s trouble may date back years. People with knowledge told Caixin that following the 2018 default of Shanghai-based CEFC China Energy Co. Ltd., billions of yuan in outstanding products were left on Zhejin’s books." www.caixinglobal.com/2025-12-16/c...

1/4 Yicai: "China’s Inner Mongolia overtook the northeastern provinces of Heilongjiang, Liaoning and Jilin in 2023 to become the provincial-level region with the oldest labor force in the country, as the young seek better opportunities elsewhere." www.yicaiglobal.com/news/inner-m...

While overall retail sales grew 4.0% year on year during the first eleven months of 2025, retail sales of services grew much faster, by 5.4%. This is probably a good thing for employment as services tend to be more labor intensive www.yicaiglobal.com/news/chinas-...

Xinhua: "In the January-November period, the number of railway passenger trips reached 4.28 billion across the country, up 6.6 percent from the same period last year, according to China State Railway Group." english.news.cn/20251216/455...

In my latest piece for the FT, I argue that conditions that make European manufacturing inefficient are not the same as conditions that make European manufacturing globally uncompetitive. As an aside, this is an especially relevant distinction for Germany. www.ft.com/content/da6d...

1/8 It's hard to find anything good in the November economic data for China, just as it is hard to find anything new to say. All the important indicators continue to weaken, as they have throughout the year, in some cases even decelerating further. english.news.cn/20251215/a59...

Yicai: "China will further reduce the number of small and medium-sized financial institutions and improve their quality next year, as part of broader efforts to prevent financial risks and deepen reforms in the capital market." www.yicaiglobal.com/news/chinas-...

1/6 Yicai: "The stabilization and recovery of investment was one of the key economic tasks for next year laid out at the Chinese government’s Central Economic Work Conference." www.yicaiglobal.com/news/china-s...

1/6 Very interesting Caixin article on how the Big Four AMCs, badly hurt by falling real estate prices and weak NPL resolution, are buying bank stocks and recognizing the gap between their prices and their higher book values as paper profits. www.caixinglobal.com/2025-12-12/i...

1/2 September saw a second monthly decrease in the US trade deficit. It is too early to say, and the data may have been distorted by gold sales (which should probably be treated more as a capital account transaction than... www.bloomberg.com/news/article...

Bloomberg: "The result could be the biggest rethink of EU policy toward Beijing in at least a decade." I've been to Europe four times since October for government or government-related meetings, and all anyone wanted to discuss was trade. www.bloomberg.com/news/article...

Very interesting (and worrying) Bloomberg story on China Vanke's $50 billion debt restructuring. www.bloomberg.com/news/article...

1/8 Caixin: "While concerns about weak demand and external uncertainties persist, this year's Central Economic Work Conference, which concluded on Thursday, marked a shift in tone. The official readout framed China's core economic challenge as... www.caixinglobal.com/2025-12-12/c...

1/2 Good Jared Bernstein piece pointing out what should be obvious (but isn't to many economists): citizens are not just consumers, but are also producers I'd add that this means that the only sustainable way to increase consumption is... @jaredb-econ.bsky.social open.substack.com/pub/econjare...

1/4 WSJ: "President Trump’s barrage of tariff increases threatened to chill global trade flows, but commercial exchanges continued to increase as most of the international commerce system functions as it did before the onslaught." www.wsj.com/economy/trad...

Cómo Europa puede aprovechar su poder económico agendapublica.es/noticia/2045...

Robin Brooks on China's undervalued RMB. This isn't a new idea for Brooks, but it seems like the November 18 OMFIF paper by Brad Setser and Mark Sobel marked a change in the overall narrative. open.substack.com/pub/robinjbr...