Can China Avoid Japan’s Lost Decades?
Low bond yields, weak inflation and a struggling property market have raised fears China may see its own version of Japan’s 1990s “balance sheet recession.” Can China change course in time to avoid its own “lost decades?”
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00:00 Introduction
01:24 Japan’s lost decades
02:29 Balance sheet recession
04:38 China’s similarities
06:43 China’s differences
08:03 Lessons from Japan
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47 Comments
China been in a lost decade since 2019 !
Japan at no point in time was producing 40% of the world's products. Also China's property market never had the same level of bubble Japan had. These comparisons were done for the news headline. Not really comparable.
In short, I mean China, unlike Japan, has a strong centralized government with full sovereignty to decide its financial, monetary and even defense policies and can somehow roll back to government leaded socialist economy. It's state capitalism not market economy and you know how state capitalism will do when it tries to deal with recessions….
Talk is cheap. If you’re confident, put your money where your mouth is and invest in Chinese stocks ✌️
Japanese economy's lost decades which started from the burst of bubble economy in 80's lengthened after intertwining with the aging population, which I observe the much worse forecast in China, e.g. Japanese population was almost flat from 1990 to 2020 ( but aging), while Chinese population will decrease by over 100 million from 2025 to 2055.
The AI and industrial power are different factors for this case though.
It's on CCP's hand if it can change its tradition to restrain the use of fiscal stimulus, which was even stricter in Xi's administration (look at what we see in COVID). This kind of policy change may be very difficult today….
A retiring Chinese person (60) joined the workforce in 1980, with barely 10 years of total education, and 25% completely illiterate, works at a unprofitable SOE, basically as an assistance program.
That worker is being replaced by a college or university graduate who's a digital native with 20 points higher IQ.
Productivity is ~2.5x higher on average.
This is the fundamental difference between Japan and China's "demographic collapse"
When the 2010 worker retired in 50 years, 2060, if productivity gains slow worldwide, then we may see a lost decade.
But don't count on it now.
Ofc they can. Japan has have like 50k us troops and they can't do anything about it.
Wumaos going crazy in the comments as usual.
What about the "indo-europeans"?
These Western media outlets are really obsessed with anti-China propaganda. Europe is the one in trouble yet they focus on China.
False proposition absolutely ridiculous
Western propaganda
Do not sign any agreement with the USA
Can US avoid Rome’s collapse?
Let me briefly explain what has happened in Japan in the last 30 years. The distribution and retail industry has developed, and many large discount stores have opened, significantly increasing purchasing power. Tariffs have been lowered, lowering the prices of imported goods. Thanks to the Internet, access to excellent information and products has become easier. The performance of cars, PCs, electrical appliances, and clothing has improved significantly. The average life expectancy has increased by more than five years. However, for some reason, there is an atmosphere that says it is not right to say such things. I'm sorry.
This is vastly underestimating the role the government took in pivoting cash surplus they have towards Industrialization, rather than supporting consumer's spending power, since 2018 and Made In China 2025 was implemented. They are aiming for long sustainable growth at the expense of short term earnings.
"But at what cost?"
No and yes.
I think it will suffer similar crash, but unlike Japan, it can easily bounce back.
Unlike Japan, they're not stagnant and rooted in tradition.
A benefit to having constant mass-casualty events in history means the populace is willing to embrace new tactics if the old don't work.
Whoever wrote the script for this video had no idea what is Economic or what is public policy, probably don’t even have an undergraduate degree. Even he/she/them had one, it’s probably sth related to media studies nonsense.
Propaganda again
Propaganda
China will do just fine , their EVs already eating everyone’s lunch, their drones are king, their consumer electronics and mobiles are supreme, their high speed trains are the fastest , shipbuilding , robotics, robodogs, etc. They have invested heavily in many things – infrastructure, 6G , space, hypersonic ICBMs, new radars , subways , nuclear power, renewable energy, biotech, AI, etc.
They produce the most STEM graduates. Simply put , they are moving forward at an incredible pace that others will find hard to keep up. In 5 yrs China’s military will far exceed US. If China spends US200M , US needs US1T to just keep up.
祝福祖国繁荣富强，人民幸福安康
The probability of china following japan's footstep?
1. Economically yes. China followed exactly japan's mistake, vitalizing economy thru real estate bubble. Debts on real estate are not easy to be removed just as shown in the cases of japan and the U.S, pulverizing any attempt to revive economy with sentiment constantly dampened.
2. Politically no. China has sufficient military power to countervail any attempts of the U.S. to take china down. Japan and Germany, while under the plaza accordance, had no military power as much as china has now because they went all-in for economy while entrusting defense to the U.S. So, can't say no to the secretary of treasury, Jim Baker.
China already produced everything inhouse, they just have to dodge the Americans and they'll be fine.
When the bubble burst in japan they had about 19 years of population growth to go, which helped to absord the over investment in housing.
China's population has been in official decline since 2023, but likely it's been falling for a decade.
The big battle going forward will be who has to wear the losses of all the malinvestment in housing and industrial capacity.
The difference between Japan and China is that Japan it was forced by United States for China everything is self inflicted from the coronavirus to property market collapse evergrande and there is hate for China and Chinese companies because of the virus which destroyed billions of lives
Unlike Japan China does not have an overlord like the USA.
从经济学的角度来看，只有在居民部门这一点上，中国和日本的情况是极其相似的，但其他的完全不一样
You should ask "Can the South Korea, Germany and UK avoid Japan's lost decades"? This author sounds like a first year economy student doing her first assignment… No credibility.
Anyone living outside of the mainland will tell you how Chinese tours have dropped significantly.
It is obvious that they are trapped in the middle income trap at best – and – possibly face a real crash.
Unlike Japan though – China will not sacrifice the rich like Japan did (to protect the middle class) and the CCP is not as stable as the Japanese government was/is.
ur western only can see the first tier city in china
China didn't agree to sign anything like the what Japan signed, the Plaza Accord
people in China are finally realizing how over inflated the birth numbers have been since the 1990s, especially as people born after 2000 are entering the work force in the last few years. the real problem for them will hit around 2030 when the 2010s reach age of adulthood and realize just how few of them are around to have to take care of a retired population double their size.
The bubble economy was caused by window guidance pumping prices. The prices should have never been that high in the fist place. If you thought property was a safe haven at those prices, you were delusional.
The US is already in its lost decades and it will collapse more.
It's funny that there is no mention at all about the effect of American pressure towards Japan which is the main reason for Japan's lost decades. So conveniently omitted from reasoning.
A completely useless video….then it's Bloomberg, that's their specialty.
Of course you desperately want China to have a lost decade. You are so fearful of them catching up, aren’t you?
Can US avoid lost 30 years like Japan did? You should have question like this!
I believe Japan’s "Lost 30 Years" resulted from multiple factors: the Plaza Accord, the Bank of Japan’s aggressive interest rate hikes, the forced transfer of semiconductor technology to American companies like Intel, lagging IT development leading to missed opportunities in digital taxation, talent shortages caused by relaxed education policies ("yutori education"), industrial hollowing-out due to production relocation, and ultimately weakened consumer spending power. However, it must be acknowledged that the root cause lies in America’s hostile policies toward Japan. Some Japanese airspace remains under U.S. control, U.S. military bases occupy central urban areas, the U.S.-Japan Joint Committee continues to operate, and even the Tokyo District Public Prosecutors Office’s Special Investigation Department (under U.S. influence) exists as tools of control. Japan’s semi-colonial status—where it cannot even rebut American demands—is undeniable.
This is not to belittle Japan, but escaping the "Lost 30 Years" under such overwhelming American influence and surpassing the U.S. would never be tolerated by America itself.
While I cannot claim China will absolutely avoid its own "Lost 30 Years," it remains true that China has not faced the same complex institutional barriers Japan encountered.
many Chinese public servants are not receiving salaries for months, the situation is way worse than Japan
Japan's 130 Million v 1 Billion West. Result is predictable. But they are still able to lead in some industries.
China is totally a different beast. Outcome is unpredictable. I am sure it will be a multi polar world … the West and the East. The Rest will just follow ….
Bloomberg so obsessed with China it's almost like a disease
One MASSIVE mistake the CCP made was making a large part of their economy dependent on foreign trade and exports!
Once their new virus came out and shut the world down, they shot themselves in the foot. It didn't help they kept their economy shut down even after the rest of the world had already opened back up…
If domestic buying was a big part of their economy, they would've had better options…
China is a quick learner, look at their advancements in high speed rail. drones and military hardware, they will be fine in the long run
Narrator is awful