Can China avoid the Japan trap?

CHINA ADVISORY - Report 24 Nov 2021 by Andrew Collier

Two concerns dominate elite politics in China. One is the collapse of the political system similar to the Soviet Union. The second is the Japanese period of economic stagnation in the 1990s. The fear of economic stagnation is behind the sharp cutbacks in the property market and the collapse of Evergrande. How real is this possibility? I would argue that China’s financial, governmental and corporate institutions are very different from Japan’s. A readjustment process is a more likely outcome than a long stagnation.

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