Part 2/8:
In a significant discussion regarding the current state of China's economy, Professor Michael Pettis from Peking University critiques the recently announced debt relief package, asserting that it merely shifts hidden debts back onto local government balance sheets without genuinely reducing the overall debt burden. While the servicing costs for this debt may decline slightly, the impact on GDP growth will likely be negligible. As local governments strive to continue spending, which contributed heavily to their debt issues, Pettis warns that merely transferring this debt to Beijing does not address the root problems facing the economy.