Why China Can’t Copy Japan’s Economic Miracle
If you look purely at the numbers, Japan should have collapsed decades ago. It holds the highest debt-to-GDP ratio in the developed world, hovering around 250%. By contrast, China’s official central government debt looks completely manageable. Yet, global economists lose sleep over China’s debt, while largely ignoring Japan’s massive ledger.
Why? Because not all debt is created equal. This video breaks down the fundamental difference between the two largest economies in Asia. It explores the financial alchemy of Japan’s “closed-loop” domestic debt, and the terrifying, hidden web of China’s Local Government Financing Vehicles (LGFVs) and real estate shadow banking. It is a story of how a country borrows money, who it borrows it from, and the brutal demographic clock ticking behind both empires.
Footage: Shutterstock
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23 Comments
Japan was the largest creditor for decades until it was recently surpassed by Germany. And the largest carry trader was/is the Japanese government, by issuing gov bonds at low rates when the JPY was strong and purchasing US Treasury as part of its foreign reserve.
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Google AI says most of China’s LGFV debt is lent by China banks (local, regional, national, government…) all more or less controlled by the government. If the central government then defaults or restructures the debt and then bailout the banks then what would be the consequences?
One thing going for China government (but not for retirees) is weaker retirement benefits compared to other major developed countries which maybe can let it weather the high debt load.
Printing and borrowing in your own currency does not create wealth. It just hides the tax and pushes the cost onto workers, savers, and the unborn. The “more welfare” argument is exactly how countries drift into stagnation and decline. China should not copy the model that helped turn Japan into a museum of lost decades.
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Try to understand what Socialism means. I think China's population and Geographical land size led China to adopt socialism and adopt communist ideology.
This video is mostly BS that why you don't take Video with A.I voiceover seriously,Japan debt is not serious? That might be for now,but not in the future because of ageing population,there will be less young working people contributing to nation tax and slower economic growth,and not enough people contributing to elderly pension system.
While,China debt is also mostly domestic,even renown economist didn't say China wouldn't be handle their own debt but for a YouTube channel to make such a claim is really overconfident,China banking system is mostly State-controlled and they can restructured their Provincial debt anytime,and a lot of China debt is spent on infrastructure project,and building companies.
If I say you fail because … you are chinese …
than that will be the End of it, sure you have rich billionaire and millionaire good for you
But your country is a Failure because simply Your are a Failure as a Nation L O L A Chinese Failure
Because Japan is an ally of the United States and has backing from the U.S. Treasury for anything it needs. Also, most of Japan’s debt is held by Japanese citizens, so it won’t be heavily affected. In comparison, China would be affected, but since it is almost a self-sufficient economy, it could still withstand it.
Coping to the moon and back😂
일본의 경상수지흑자는 5년연속 사상최대이다. 명목GDP는 사상 첫 엔화기준 700조엔 돌파예정이다.
Guys stop arguing this channel is pro Japan. Every Asian country is somehow inferior to Japan if you go through its videos. Just a bot video creator with AI voice.
O petróleo e o diesel são o calcanhar de Aquiles da economia chinesa!
Today, China's achievements have far surpassed those of Japan.
China is a brave country not like US-tamed Japan dogs
Just the closure of the Strait of Hormuz by the United States or Iran could lead to Japan's collapse. What kind of economic miracle is that? Japan is just a short-lived carnival
Japan isn't the 4th largest economy by any metric.
The reason is simple. While both Japan and China utilize technology from other countries, Japan takes that technology and, through wildly creative ideas, creates something even more perfect than the original. In Japan, this practice is known as 魔改造 “magical modification.” Have you ever seen the Anime, Neon Genesis Evangelion? Do you know about A.T. Field? Japan is seriously trying to make it LOL
Well I am sure it is possible in the future.
Great video! Well done
这段视频由美国cia制作。
What a bunch of bs, China has FX reserves worth $10 trillion or so. That's half their gdp. Plus the LGFVs borrowed from State owned banks and so did CRRC, so they too own their own debt in their local currency, backed by massive govt savings (just not pvt savings) so yeah I call BS