Skip to main content

The content on this page is marketing communication

3 min read time

Michael Pettis: The finance professor perfectly placed at China's economic crossroads

As finance professor at Peking University specialising in Chinese financial markets and a senior fellow at the Carnegie-Tsinghua Center for Global Policy, few experts are as well-placed to discuss the country which has grabbed more headlines and investor attention than usual of late.

After two years of stellar returns, China has been one of the world's weakest stock markets so far in 2021. Chinese equities have underperformed broader emerging markets by around 14% to the end of October as investors have fretted over sweeping government intervention and the fallout from real estate giant Evergrande's high-profile failure.

The property developer's collapse confirms Pettis's long-held view that China has been over-reliant on debt and unstainable infrastructure investments to sustain its economic momentum. He argues Beijing must now act to tackle this fictional growth and wealth: "First, it must be willing to accept the much lower growth rates that will result from giving up this kind of economic activity. Second, it must begin writing down these assets and assigning the losses, which will if course depress growth further."

Sovereign adviser

Born in Zaragoza, Pettis spent his childhood in Peru, Pakistan, Morocco and Haiti before returning to Spain for high school. He began his career at Manufacturers Hanover (now JPMorgan Chase) and spent fifteen years on Wall Street running fixed income trading and capital markets desks. Pettis has also advised Latin American, Asian and Eastern European governments on debt and balance sheet strategies; roles which now give him valuable insight into China's challenges and the implications for investors.

The author of six books and over 200 articles, Pettis is also a regular contributor and columnist in the international media, including for the Financial Times where he frequently writes on the health of Chinese financial markets.

His latest book Trade Wars Are Class Wars, co-written with Matthew Klein, looks at how inequalities within countries create trade conflicts between nations. Winner of the 2021 Lionel Gelber Prize, the book outlines how governments in China, Europe, and the United States have promoted the interests of the rich over workers who can no longer afford to buy the goods they produce, have become unemployed or forced into higher levels of debt.

Two decades in China

Next year marks twenty years since Pettis moved to China. With the country at an economic crossroads, Xi Jinping expected to bid for a third term in power and mounting scepticism over its climate change commitments, there is no shortage of subject matter for his conference presentation: The expected evolution of the Chinese economy will bring together Pettis's unique perspectives from two decades' experience and promises to be both timely and valuable for investors.

New Year's Conference

Louis-Vincent Gave

The Mountain Infantryman Exploring Emerging Markets. Emerging markets have been the focus of ... Read the article now arrow_right_alt

More about New Year's Conference

Stein Svalestad

Stein Svalestad is the CEO and a portfolio manager for SKAGEN. Stein joined SKAGEN Funds almost ten ...

Jennifer Wallace

An Active Manager with a Proven Track Record. As the founder, co-owner, and investment director of ...

Loretta J. Mester

A Rate Hawk Offers Insight into the Financial Machinery. After 10 years as one of the twelve ...

Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager’s skills, the fund’s risk profile and management fees. The return may become negative as a result of negative price developments. There is risk associated with investing in funds due to market movements, currency developments, interest rate levels, economic, sector and company-specific conditions. The funds are denominated in NOK. Returns may increase or decrease as a result of currency fluctuations. Prior to making a subscription, we encourage you to read the fund's prospectus and key investor information document which contain further details about the fund's characteristics and costs. The information can be found on www.skagenfunds.com. Storebrand Asset Management administers the SKAGEN funds which are by agreement managed by SKAGEN's portfolio managers.

keyboard_arrow_up