Consumer prices in China seem once again to be facing entrenched deflationary pressures. CPI was up 0.5% year on year in July, its lowest reading since January, and was down 0.1% month on month, the third time in a row it has been down, and the fourth time this year. english.news.cn/20260809/8be...

1/9 For years, while economists both inside and outside China have called on Beijing to raise inflation and consumption by lowering interest rates and expanding credit, I've argued that they are mistakenly assuming that China's financial system is like that of the US. papers.ssrn.com/sol3/papers....

1/4 Financial Times: "The most durable way for governments to ensure that both university students and their less academic counterparts can move through the education system confident of good financial outcomes is to have a dynamic economy and robust productivity growth." www.ft.com/content/1c4a...

To fix education, fix the economy first

Weak educational outcomes often owe more to economic performance than education policy

ft.com

1/2 FT: "In a sign of deepening EU divisions, Madrid said late on Friday that it would start to check the identities and documents of travellers arriving from Italy at Spanish ports and airports from midnight—less than three hours after its announcement." www.ft.com/content/f305...

Spain reinstates border controls on Italy as tensions rise over migrants

Move widens rift between Pedro Sánchez’s government and rightwing Italian premier Giorgia Meloni

ft.com

1/3 There's probably no need to point out that China's July trade numbers would have seemed extraordinary just five or six years ago. Exports and imports were both up year on year by roughly a quarter. english.news.cn/20260807/3c0...

1/3 There seems to be a growing acknowledgement around the word that Keynes was right when he proposed at Bretton Woods a global trading regime that limited persistent trade imbalances and restricted global financial flows. www.foreignaffairs.com/united-state...

The Right Way to Balance Trade

What Comes after the neoliberal order.

foreignaffairs.com

In 2026 H1, China's gold consumption was up 1.2%, with jewelry consumption falling 33.88% to 132.13 tonnes and gold bar and coin consumption surging 28.42% to 339.34 tonnes." Chinese gold imports clearly belong more in the capital account than in the trade account. english.news.cn/20260806/82d...

It is not easy to talk about what happened recently in Ceuta without getting yelled at, but this discussion by two Carnegie scholars seems both calm and disinterested. carnegieendowment.org/emissary/202...

The Migration Wave That Embarrassed Morocco and Rattled Europe

Most migrants may have left Ceuta, but the effects may linger.

carnegieendowment.org

According to a Pew survey, younger Amercians are far more favorably disposed towards China than older Americans. www.ft.com/content/5392...

Both Trump and young Americans are warming to China

The president and Gen Z voters are far more open to a co-operative relationship with Beijing than hawks in Congress

ft.com

1/2 Li Daokui: "The overall judgment is that new drivers of growth have not yet been created, while the old growth engines of recent decades have already faded." sinocism.notion.site/Li-Daokui-Ch...

Li Daokui: China’s Biggest Economic Problem Is Not K-Shaped Divergence, but an Economy That Is Cold Overall | Notion

Translated by ChatGPT, edited by Sinocism.com

sinocism.notion.site

1/7 Goldman joins the debate, arguing that a combination of expansionary domestic policy and currency appreciation "is unlikely to be enough to address all global imbalances, but it should help move China’s own economy toward a better balance." publishing.gs.com/content/rese...

1/4 A friend just sent me this substack piece by Kieran Velasquez, "On the German Mittelstand", calling it "a very interesting history of the Mittelstand and a lovely evocation of its culture". I agree, and it is well worth reading. kieranvelasquez.substack.com/p/on-the-ger...

On the German Mittelstand

What I learned from factories across Germany

kieranvelasquez.substack.com

1/7 Bloomberg: "Massive military spending in Russia is pulling workers and capital into defense industries, pushing up labor costs and steadily eroding the competitiveness of civilian businesses." www.bloomberg.com/news/article...

Russia’s War Economy Is Fueling Pay Gains Companies Can’t Afford

As President Vladimir Putin’s full-scale invasion of Ukraine extends for a fifth year, Russian businesses can no longer afford to keep pace with the Kremlin’s war machine in the wage race.

bloomberg.com

Janan Ganesh: "There is a divergence of interest in Europe. Those who aspire to divide the continent have all too much to work with." They certainly do. EU policymaking is usually something from which foreign policymakers can pick and choose. www.ft.com/content/a47a...

Europe and the eternal north-south rift

On defence, the two sides of the continent increasingly inhabit different worlds

ft.com

SCMP cites Goldman research that argues that while growth in the Chinese economy is positive for the Australian dollar, what matters to Australia is not Chinese demand per se, but rather Chinese demand for commodities, i.e. construction and infrastructure growth. www.scmp.com/business/ban...

After US helped boost the yen, can China do the same for the Australian dollar?

Currency traders believe Beijing’s economic policies could give the Australian dollar a boost. Analysts say things are more complex in reality.

scmp.com

Good WSJ piece on the dynamics behind any potential appreciation of the Chinese RMB. Much of the analysis is from Mark Sobel. www.wsj.com/world/china/...

Xi Wants a Strong-Looking Yuan. China’s Economy Keeps Holding It Down.

Plus, Beijing accelerates its buildup in space and a drone maker cleans 28 tons of waste from Mount Everest |WSJ China for Aug. 4.

wsj.com

Most people might not guess that this is Beijing, but this is what I saw earlier today as I cycled along Liangma in the northeast part of the city.

Financial Times: "Beijing is stepping up efforts to attract foreigners to its sovereign debt by building out futures contracts and other bond market infrastructure." www.ft.com/content/0fe0...

China courts global investors with bond market tweaks

Building out market infrastructure is welcome but the country’s economic challenges could remain a deterrent

ft.com

1/6 Financial Times: "China has launched a global hunt for hundreds of billions of dollars in unpaid taxes going back decades as Beijing seeks to fill a deepening fiscal hole by targeting the ultra rich." www.ft.com/content/e179...

China launches global tax hunt going back decades

Fiscal pressure sparks retroactive campaign and tougher controls on future offshore capital flows

ft.com

1/2 The New Yorker has a very good article by Evan Osnos on the potential emergence of China's technological leadership. Osnos wonders if the future of technology might be Chinese, but he also notes that this future is very opaque. www.newyorker.com/magazine/202...

The Future, Made in China

Beijing is competing with the U.S. for tech supremacy. Who wins will have huge political implications.

newyorker.com

1/6 Bloomberg: "The aftermath of last week’s Ceuta border crisis may be unprecedented too, judging by the blame game erupting on a continent where far-right parties are riding high and several key countries are entering election season." www.bloomberg.com/opinion/arti...

Ceuta’s Migrant Chaos Deserves a Better Response than a Blame Game

Last week’s Ceuta border crisis was unprecedented in terms of scale, with at least 67 reported deaths after around 60,000 migrants breached the boundary between Morocco and the Spanish enclave (with a...

bloomberg.com

According to Yicai, the year-on-year decline in cumulative sales in China's property market was high, although it narrowed modestly in July. Monthly sales fell sharply and new-home transactions remained well below last year's levels. www.yicaiglobal.com/news/chinas-...

China's Top 100 Developers See Sales Slowdown Ease Despite Weak July

yicaiglobal.com

FT: "The growing popularity of institutions such as police and military academies reflects a broader shift among young Chinese, who are increasingly willing to trade academic prestige for career certainty." www.ft.com/content/cfe0...

Chinese student high-flyers set sights on police and military academies

Weak economy boosts appeal of institutions that can offer more secure job prospects than even top-tier universities

ft.com

"Les deux chocs chinois ne constituent pas deux explications concurrentes de l’évolution de la Chine. Ce sont deux manifestations extérieures différentes d'un même modèle de croissance" Ma traduction 👉 annotationsbis.blogspot.com/2026/08/derr...

Michael Pettis@michaelpettis.bsky.social · last wk.

1/2 Good new Adam Tooze piece on China Shock 1.0 and China Shock 2.0: "China shock 2.0 isn’t simply a globalization shock triggering a social backlash. What China is delivering in the 2020s is an industrial policy shock of global scale." open.substack.com/pub/adamtooz...

For my friends in Beijing, Zhang Shouwang is preforming tomorrow night at Raw Material as part of the Sally Can't Dance series. Whenever he performs it is a highlight.

In top-tier cities, commercial real estate may be bottoming out, at least temporarily: "In Shanghai, the number of commercial property deals jumped 77% year on year in the first half of 2026, while the total value of those transactions was up 18%." sc.mp/4qope?utm_so...

China’s investors snap up prime office space, betting on a property rebound

Commercial properties are changing hands at a much faster rate in Shanghai and other major cities, as investors bet on a market rebound.

sc.mp

Wang Xiangwei: "As long as external demand holds up, policymakers appear relatively untroubled by weakening domestic demand, despite rhetoric to the contrary." www.scmp.com/opinion/chin...

Opinion | How likely is Beijing to walk the talk on boosting consumption?

As long as external demand holds up, policymakers appear relatively untroubled by weakening domestic demand, despite rhetoric to the contrary.

scmp.com

Yuekai's Luo Zhiheng: "The economy remains highly dependent on policy support, while self-sustaining growth momentum is still weak and the vitality of households, businesses and local governments has yet to be fully restored." www.chinadaily.com.cn/a/202608/03/...

Caixin: "China’s State Council approved the construction of eight new nuclear power reactors. The approvals underscore Beijing’s unparalleled commitment to expanding its atomic fleet as the country races to nearly double its operational nuclear capacity." www.caixinglobal.com/2026-08-01/b...

Beijing Clears Eight New Reactors as China Accelerates Nuclear Buildout

Most of the newly approved units will use the domestically developed Hualong One design as Beijing pushes to expand operating nuclear capacity to 110 million kilowatts by 2030

caixinglobal.com

1/5 SCMP: "After blanketing the country in railways, expressways, airports and seagoing canals to reach a 91 per cent completion rate, the push for the next 4 percentage points raises questions for the world’s second-largest... sc.mp/134hm?utm_so...

How much transport is enough? China eyes 95% coverage across its record network

Beijing aims to expand nation’s world-leading network coverage, raising questions over need for more infrastructure projects as authorities flag ‘weak links’.

sc.mp