China's Local Governments to Use Assets for Debt Issues: Professor Pettis

The transcript discusses China's economic challenges, focusing on the need for demand-side stimulus and the reluctance of Beijing to use its balance sheet for this purpose. It highlights local government debt issues and the potential use of assets to resolve these problems. The discussion differentiates between growth constraints and crises, emphasizing China's ability to manage liabilities. The property sector's unexpected downturn is examined, illustrating excessive risk-taking. The transcript concludes with concerns about infrastructure spending and its future impact.

What is the current weakness in China's economic policy mix according to the discussion?

What consensus do economists have regarding the stimulus measures needed in China?

What are the challenges faced by local governments in China regarding income and debt?

How does the speaker describe the potential resolution of local government debt issues?

What unintended consequences might arise as China moves out of a debt-driven economy?

What does the speaker suggest about the relationship between real estate prices and risk-taking in the economy?

What are the implications of slowing infrastructure spending in China according to the discussion?